Using the New Products Margin to Predict the Sectoral Impact of Trade Reform
This paper develops a methodology for predicting the impact of trade liberalization on exports by industry (2-digit ISIC) based on the distribution of exports before the reform by product (5-digit SITC). Using the results of Kehoe and Ruhl (2009) that much of the growth in trade after trade liberalization is in products that are traded very little or not at all, we characterize industries in Canada, Mexico, and the United States by the fractions of exports in 1988 accounted for by these least traded products. We show that a prediction of trade growth 1988â€“2007 by industry based on these data performs significantly better than the leading applied general models that were originally used for the policy evaluation of North American Free Trade Agreement.
|Date of creation:||2013|
|Date of revision:|
|Contact details of provider:|| Postal: Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA|
Web page: http://www.EconomicDynamics.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Costas Arkolakis & Arnaud Costinot & Andrés Rodríguez-Clare, 2009.
"New Trade Models, Same Old Gains?,"
NBER Working Papers
15628, National Bureau of Economic Research, Inc.
- Marc J. Melitz, 2003.
"The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity,"
Econometric Society, vol. 71(6), pages 1695-1725, November.
- Melitz, Marc J, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," CEPR Discussion Papers 3381, C.E.P.R. Discussion Papers.
- Mark J. Melitz, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," NBER Working Papers 8881, National Bureau of Economic Research, Inc.
- Kehoe,Timothy J. & Srinivasan,T. N. & Whalley,John (ed.), 2005. "Frontiers in Applied General Equilibrium Modeling," Cambridge Books, Cambridge University Press, number 9780521825252, November.
- David Cox & Richard Harris, 1983.
"Trade Liberalization and Industrial Organization: Some Estimates for Canada,"
523, Queen's University, Department of Economics.
- Cox, David & Harris, Richard, 1985. "Trade Liberalization and Industrial Organization: Some Estimates for Canada," Journal of Political Economy, University of Chicago Press, vol. 93(1), pages 115-45, February.
- Kozo Kiyota & Robert M. Stern, 2007. "Economic Effects of a Korea-U.S. Free Trade Agreement," Working Papers 557, Research Seminar in International Economics, University of Michigan.
- Feenstra, Robert C, 1994. "New Product Varieties and the Measurement of International Prices," American Economic Review, American Economic Association, vol. 84(1), pages 157-77, March.
- Horacio E. Sobarzo, 1992. "A General Equilibrium Analysis of the Gains from Trade for the Mexican Economy of a North American Free Trade Agreement," The World Economy, Wiley Blackwell, vol. 15(1), pages 83-100, 01.
- Hugo Rojas-Romagosa & J.F. Francois & L. Rivera, 2008. "Economic perspectives for Central America after CAFTA; a GTAP-based analysis," CPB Discussion Paper 99, CPB Netherlands Bureau for Economic Policy Analysis.
- Timothy J. Kehoe & Kim J. Ruhl, 2006.
"How Important is the New Goods Margin in International Trade?,"
2006 Meeting Papers
733, Society for Economic Dynamics.
- Timothy J. Kehoe & Kim J. Ruhl, 2013. "How Important Is the New Goods Margin in International Trade?," Journal of Political Economy, University of Chicago Press, vol. 121(2), pages 358 - 392.
- Timothy J. Kehoe & Kim J. Ruhl, 2009. "How important is the new goods margin in international trade?," Staff Report 324, Federal Reserve Bank of Minneapolis.
- Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-21, September.
When requesting a correction, please mention this item's handle: RePEc:red:sed013:1227. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann)
If references are entirely missing, you can add them using this form.