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Reconciled Trade Flow Estimates Using an FGLS Estimator

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Listed:
  • Thomas Baranga

Abstract

This paper proposes a new method to reconcile countries' reports of their bilateral trade, extracting the optimal amount of information from noisy reports. Reconciled estimates are a weighted average of exporter and importer reports, with weights chosen to minimise the variance of the error in the reconciliation estimate. Reports of countries that appear to report their trade more precisely are given more weight, but non-zero weight is (optimally) given even to relatively noisy reporters.

Suggested Citation

  • Thomas Baranga, 2018. "Reconciled Trade Flow Estimates Using an FGLS Estimator," Economic Statistics Centre of Excellence (ESCoE) Discussion Papers (2017-2023 papers hosted by The National Institute of Economic and Social Research) ESCoE DP-2018-01, Economic Statistics Centre of Excellence (ESCoE).
    • Handle: RePEc:nsr:escoed:escoe-dp-2018-01
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    References listed on IDEAS

    as
    1. Baldwin, Richard & Taglioni, Daria, 2006. "Gravity for Dummies and Dummies for Gravity Equations," CEPR Discussion Papers 5850, Centre for Economic Policy Research.
    2. Harvey, A C, 1976. "Estimating Regression Models with Multiplicative Heteroscedasticity," Econometrica, Econometric Society, vol. 44(3), pages 461-465, May.
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    Cited by:

    1. Aitor Irastorza-Fadrique & Peter Levell & Matthias Parey, 2023. "Household responses to trade shocks," IFS Working Papers W23/13, Institute for Fiscal Studies.
    2. Dorn, David & Levell, Peter, 2021. "Trade and Inequality in Europe and the US," CEPR Discussion Papers 16780, Centre for Economic Policy Research.

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    Keywords

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    JEL classification:

    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • F10 - International Economics - - Trade - - - General
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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