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Testing Trade Theory

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  • Edward E. Leamer

Abstract

This review of the empirical literature in international micro economics observes that data have had a disappointingly small effect on the intellectual lives of international economists. The reasons for this are many and diverse, but one general comment is made here: We need better balance between the three layers of the argument: the issues, the theory and the data. The profession as a whole is imbalanced in favor of theory. But most of the empirical work is also imbalanced. Some empirical studies take the theory too seriously and lose track of the issues. Others do not take the theory seriously enough and try to make do with ad hoc but inappropriate empirical models. Some of these which lack the theory layer lack as well any clear issues. We need better balance.

Suggested Citation

  • Edward E. Leamer, 1992. "Testing Trade Theory," NBER Working Papers 3957, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:3957
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    1. Charles L. Ballard & Don Fullerton & John B. Shoven & John Whalley, 1985. "General Equilibrium Analysis of Tax Policies," NBER Chapters,in: A General Equilibrium Model for Tax Policy Evaluation, pages 6-24 National Bureau of Economic Research, Inc.
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    Cited by:

    1. Grip A. de & Hoevenberg J., 1996. "Upgrading in the European Union," ROA Research Memorandum 002, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    2. Donald R. Davis & David E. Weinstein, 2002. "What Role for Empirics in International Trade?," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 57(04), pages 441-468, December.
    3. Bernhofen, Daniel M., 1999. "Intra-industry trade and strategic interaction: Theory and evidence," Journal of International Economics, Elsevier, vol. 47(1), pages 225-244, February.
    4. Sjoholm, Fredrik, 1999. "Exports, Imports and Productivity: Results from Indonesian Establishment Data," World Development, Elsevier, vol. 27(4), pages 705-715, April.
    5. Corvers, Frank & de Grip, Andries, 1997. "Explaining trade in industrialized countries by country-specific human capital endowments," Economic Modelling, Elsevier, vol. 14(3), pages 395-416, July.
    6. Horácio C. Faustino & Nuno C. Leitão, 2006. "Portuguese Intra-Industry Trade: A Dynamic Panel Data Analysis," Working Papers Department of Economics 2006/21, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    7. Cörvers F. & Reininga T., 1998. "The Dutch Factor Content of Human and Physical Capital: A Test of the HOV Model," ROA Research Memorandum 001, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    8. Silvia Nenci, 2009. "Tariff liberatization and the growth of word trade: A comparative historiocal analysis to evaluate the multilateral trading system," Departmental Working Papers of Economics - University 'Roma Tre' 0110, Department of Economics - University Roma Tre.
    9. Junankar, P.N. & Madsen, J.B., 1996. "Unemployment in the OECD: models and mysteries," Discussion Paper Series In Economics And Econometrics 9648, Economics Division, School of Social Sciences, University of Southampton.
    10. Rama, Martin, 1993. "Rent - seeking trade policy : a time series approach," Policy Research Working Paper Series 1142, The World Bank.
    11. Davis, Donald R., 1995. "Intra-industry trade: A Heckscher-Ohlin-Ricardo approach," Journal of International Economics, Elsevier, vol. 39(3-4), pages 201-226, November.
    12. Joan A. Martín & Vicente Orts, 2001. "A two-stage analysis of monopolistic competition models of intraindustry trade," Investigaciones Economicas, Fundación SEPI, vol. 25(2), pages 315-333, May.
    13. Aturupane, Chonira & Djankov, Simeon & Hoekman, Bernard, 1997. "Determinants of Intra-Industry Trade between East and West Europe," CEPR Discussion Papers 1721, C.E.P.R. Discussion Papers.
    14. Leo Sleuwaegen & Koen Backer, 2001. "Multinational firms, market integration, and trade structure: What remains of the standard-goods hypothesis?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 137(3), pages 379-403, September.
    15. A. Porojan, 2001. "Trade Flows and Spatial Effects: The Gravity Model Revisited," Open Economies Review, Springer, vol. 12(3), pages 265-280, July.
    16. Predrag Rajsic & Glenn Fox, 2017. "Quota prices as indicators of comparative advantage in supply-managed industries," Agricultural Economics, International Association of Agricultural Economists, vol. 48(2), pages 165-174, March.
    17. Farhad Rassekh, 1993. "International trade and the relative dispersion of industrial wages and production techniques in 14 OECD countries, 1970–1985," Open Economies Review, Springer, vol. 4(3), pages 325-344, September.
    18. Chang, Hsaio-chuan, 1999. "Wage Differential, Trade, Productivity Growth and Education," Departmental Working Papers 2000-01, The Australian National University, Arndt-Corden Department of Economics.
    19. Hsiao-chuan Chang, 2003. "International Trade, Productivity Growth, Education and the Wage Differential: A Case Study of Taiwan," Journal of Applied Economics, Universidad del CEMA, vol. 6, pages 25-48, May.

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