Arbeitspapier
Per Capita Income, Market Access Costs, and Trade Volumes
There is strong empirical evidence that countries with lower per capita income tend to have smaller trade volumes even after controlling for aggregate income. Furthermore, poorer countries do not just trade less, but have a lower number of trading partners. In this paper, I construct and estimate a general equilibrium model of trade that captures both these features of the trade data. There are two novelties in the paper. First, I introduce an association between market access costs and countries�development levels, which can account for the effect of per capita income on trade volumes and explain many zeros in bilateral trade �ows. Secondly, I develop an estimation procedure, which allows me to estimate both variable and �fixed costs of trade. I �nd that given the estimated parameters, the model performs well in matching the data. In particular, the predicted trade elasticity with respect to income per capita is close to that in the data.
- Language
-
Englisch
- Bibliographic citation
-
Series: Munich Discussion Paper ; No. 2010-27
- Classification
-
Wirtschaft
- Subject
-
export zeros
fixed costs of trade
country extensive margin
Nationaleinkommen
Internationale Wirtschaft
Außenhandelselastizität
Markteintritt
Kosten
Allgemeines Gleichgewicht
Entwicklungsstufe
Theorie
Schätzung
Welt
- Event
-
Geistige Schöpfung
- (who)
-
Tarasov, Alexander
- Event
-
Veröffentlichung
- (who)
-
Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät
- (where)
-
München
- (when)
-
2010
- DOI
-
doi:10.5282/ubm/epub.11494
- Handle
- URN
-
urn:nbn:de:bvb:19-epub-11494-7
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Tarasov, Alexander
- Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät
Time of origin
- 2010
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