Transitional Growth and Trade with Frictions: A Structural Estimation Framework

2020 ◽  
Vol 130 (630) ◽  
pp. 1583-1607 ◽  
Author(s):  
James E Anderson ◽  
Mario Larch ◽  
Yoto V Yotov
Keyword(s):  
Gravity Model ◽  
Capital Accumulation ◽  
Structural Model ◽  
Steady States ◽  
Trade Costs ◽  
Country Size ◽  
Accumulation Mechanism ◽  
Producer Prices ◽  
Gravity Model Of Trade ◽  
Dynamic Path

Abstract We build and estimate a structural model of transitional growth and trade in a many-country world. The gravity model of trade is combined with a capital accumulation mechanism driving transition between steady states. Trade affects growth through changes in consumer and producer prices. Simultaneously, capital accumulation affects trade directly through changes in country size and indirectly through changes in the incidence of trade costs. Theory maps to an econometric system that identifies the parameters of the model and establishes causal links between trade, capital accumulation and income. Counterfactual trade liberalisation magnifies static gains by a dynamic path multiplier of 1.8.

scholarly journals Gravity Model of Trade of the Czech and Slovak Republics 1995-2012: How Have Determinants of Trade Changed?

2015 ◽  
Vol 63 (6) ◽  
pp. 759-777 ◽  
Author(s):  
Martin Grančay ◽  
Nóra Grančay ◽  
Jana Drutarovská ◽  
Ladislav Mura
Keyword(s):  
Gravity Model ◽  
Gravity Model Of Trade

scholarly journals EFFECTS OF REGIONALIZED TRADE RESTRICTIONS ON QUANTITY EXPORTED DURING A HIGHLY PATHOGENIC AVIAN INFLUENZA EVENT

2018 ◽  
Vol 50 (2) ◽  
pp. 270-289 ◽  
Author(s):  
JADA M. THOMPSON
Keyword(s):  
International Trade ◽  
Avian Influenza ◽  
Gravity Model ◽  
Highly Pathogenic Avian Influenza ◽  
Trade Restrictions ◽  
Highly Pathogenic ◽  
Pathogenic Avian Influenza ◽  
Gravity Model Of Trade

AbstractFrom December 2014 to June 2015, U.S. poultry was affected by highly pathogenic avian influenza that led to destruction of 48 million birds and losses in international trade. During the event, 45 countries placed trade restrictions on U.S. poultry exports, varying from regionalized to national poultry restrictions. Using a gravity model of trade, the effects on quantity traded is estimated for poultry exports at the aggregated and disaggregated commodity level to understand product flows during an event. Results indicate U.S. poultry exports benefit from countries willing to apply limited trade restrictions, and the trade impact varies across disaggregated commodities.

scholarly journals A Gravity Model of Trade for Nicaraguan Agricultural Exports

2018 ◽  
Vol 37 (74) ◽  
pp. 391-428
Author(s):  
Medardo Aguirre González ◽  
Claudio Candia Campano ◽  
Lilliam Antón López
Keyword(s):  
Gravity Model ◽  
Free Trade ◽  
Free Trade Agreement ◽  
Free Trade Agreements ◽  
Trade Agreement ◽  
Ordinary Least Squares ◽  
Agricultural Exports ◽  
Determining Factors ◽  
Trading Partners ◽  
Gravity Model Of Trade

This research aims to find the determining factors of Nicaraguan agricultural exports. To carry out this study, the author formulated a Gravity Model of Trade (GMT) and then made an estimation using a version of Ordinary Least Squares (OLS) that incorporates a consistent covariance matrix estimator to correct the heteroskedasticity and autocorrelation effects. The data considered observations over twenty years and for twelve countries: eight have signed a Free Trade Agreement (FTA) with Nicaragua and four have not. The variables that significantly increased the flow of Nicaraguan agricultural exports are the following: Nicaragua’s trading partners’ population, Nicaragua’s Gross Domestic Product per capita (GDP pc), the Real Exchange Rate (RER), and Nicaragua’s trading partners’ GDP pc; however, the distance variable turned out to be significantly trade-inhibiting. Free Trade Agreements (FTAs) predominantly have significant effects.

scholarly journals Liquidity Constraints, Fiscal Externalities and Optimal Tuition Subsidies

2017 ◽  
Vol 9 (4) ◽  
pp. 313-343 ◽  
Author(s):  
Nicholas Lawson
Keyword(s):  
Capital Accumulation ◽  
Structural Model ◽  
Liquidity Constraints ◽  
Relative Importance ◽  
Tax Base ◽  
Sufficient Statistics ◽  
Subsidy Policy ◽  
Fiscal Externalities ◽  
Tuition Subsidies ◽  
Tuition Subsidy

A large literature focuses on two important rationales for government subsidies to college students: positive fiscal externalities from a larger tax base, and liquidity constraints. This paper provides a first attempt to gauge the relative importance of these mechanisms. I use US data in combination with two modeling approaches: calibration of a simple structural model of human capital accumulation, and a ”sufficient statistics” approach. The resulting optimal subsidies are larger than median public tuition by about $3,000 per year. This finding is driven by fiscal externalities; optimal tuition subsidy policy is not sensitive to the extent of liquidity constraints. (JEL H52, H75, I22, I23, I28)

scholarly journals Does German Development Aid Promote German Exports?

2009 ◽  
Vol 10 (3) ◽  
pp. 317-338 ◽  
Author(s):  
Inmaculada Martínez-Zarzoso ◽  
Stephan Klasen ◽  
Felicitas Nowak-Lehmann D. ◽  
Mario Larch
Keyword(s):  
Gravity Model ◽  
Development Aid ◽  
Point Estimate ◽  
Steady Increase ◽  
German Development ◽  
Trade Show ◽  
Long Run ◽  
Gravity Model Of Trade ◽  
Over Time

Abstract This paper uses a static and dynamic gravity model of trade to investigate the link between German development aid and exports from Germany to the recipient countries. The findings indicate that, in the long run, German aid is associated with an increase in exports of goods that is larger than the aid flow, with a point estimate of 140% of the aid given. In addition, the evolution of the estimated coefficients over time shows an effect that is consistently positive but that oscillates over time. Interestingly, after a decrease in the 1990s, the estimated coefficients of the effect of aid on trade show a steady increase in the period between 2001 and 2005. The paper distinguishes among recipient countries and finds that the return on aid measured by German exports is higher for aid to countries considered ‘strategic aid recipients’ by the German government.We also find some evidence that aid given by other EU members reduces German exports.

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