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Why Trade Matters After All

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  • Ralph Ossa

Abstract

I show that accounting for cross-industry variation in trade elasticities greatly magnifies the estimated gains from trade. The main idea is as simple as it is general: While imports in the average industry do not matter too much, imports in some industries are critical to the functioning of the economy, so that a complete shutdown of international trade is very costly overall.

Suggested Citation

  • Ralph Ossa, 2012. "Why Trade Matters After All," NBER Working Papers 18113, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:18113
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    JEL classification:

    • F10 - International Economics - - Trade - - - General

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