Estimates of the Trade and Welfare Effects of NAFTA

Caliendo, Lorenzo; Parro, Fernando

doi:10.3386/w18508

Cited by 430 publications

(989 citation statements)

References 49 publications

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“…input-output linkages as in the early work of Krugman and Venables (1995), Eaton and Kortum (2002), Alvarez and Lucas (2007), and more recently Di Giovanni and Levchenko (2009), Caliendo andParro (2010), and Balistreri, Hillberry, and Rutherford (2011). Formally, we maintain the same preference structure as in the previous section and introduce intermediate goods parsimoniously…”

Section: Tradable Intermediate Goodsmentioning

confidence: 99%

“…3, 5. 18 For the purposes of this chapter, the main advantage of the estimation procedure in Caliendo and Parro (2010) is that it is consistent with all quantitative trade models satisfying the sector-level 16 Without balanced trade in goods, R j 6 = Y j , this would generalize…”

Section: Multiple Sectorsmentioning

confidence: 99%

“…Anderson and Yotov (2010), Donaldson (2008), Caliendo and Parro (2010), Costinot, Donaldson, and Komunjer (2010), Hsieh and Ossa (2011), Zhang (2011), Ossa (2012), Shikher (forthcominga), and Shikher (forthcomingb). Formally let us assume that the representative agent in 12 In this special case, one can show that the welfare impact of changes in the number of domestic varieties (if any) exactly compensates the welfare impact of changes in the number of foreign varieties (if any), as emphasized in Feenstra (2010).…”

Section: Multiple Sectorsmentioning

confidence: 99%

“…17 Trade elasticities for agriculture and manufacturing sectors are from Caliendo and Parro (2010) while the trade elasticity for service sectors is simply held equal to the aggregate elasticity used in Section 2. 3, 5.…”

Section: Multiple Sectorsmentioning

confidence: 99%

“…Caliendo and Parro (2010) use a multi-sector version of Eaton and Kortum (2002) with intermediate goods calibrated to match trade data from 1993 to study the effects of NAFTA. This model is a special case of the models considered in Section 3.4 in that it does not feature any scale effects: δ s = 0 for all s. After feeding tariff changes caused by NAFTA between 1993 and 2005, they find that the simulated changes can account for 93% of the observed change in Mexico's total trade over GDP, 58% for Canada, and 55% for the United States.…”

Section: Time Series Evidencementioning

confidence: 99%

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We review a recent body of theoretical work that aims to put numbers on the consequences of globalization. A unifying theme of our survey is methodological. We rely on gravity models and demonstrate how they can be used for counterfactual analysis. We highlight how various economic considerations-market structure, firm-level heterogeneity, multiple sectors, intermediate goods, and multiple factors of production-affect the magnitude of the gains from trade liberalization. We conclude by discussing a number of outstanding issues in the literature as well as alternative approaches for quantifying the consequences of globalization.

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Section: Tradable Intermediate Goodsmentioning

confidence: 99%

Section: Multiple Sectorsmentioning

confidence: 99%

Section: Multiple Sectorsmentioning

confidence: 99%

Section: Multiple Sectorsmentioning

confidence: 99%

Section: Time Series Evidencementioning

confidence: 99%

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Sustainable agricultural production, income, and eco‐labeling: What can be learned from a modern Ricardian approach?

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2022

Applied Eco Perspectives Pol

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In this article, trade‐in sustainably produced agricultural products with eco‐labeling are modeled using a modern Ricardian framework. Based on this approach, expressions are derived for the share of products importers purchase from specific exporters for low‐cost unsustainable and high‐cost sustainable production technologies, assuming consumers have non‐homothetic preferences. The consumer and sustainability gains from eco‐labeling are also analyzed, along with a discussion and comparison of the effects of mutual recognition versus harmonization of countries' eco‐labeling regimes.

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Export creation of the Belt and Road Initiative: “Give‐them‐a‐fish” or “Teach‐them‐to‐fish”?

Chen

Zhang

Zhao

2022

International Studies of Economics

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The Belt and Road Initiative (BRI) initiated by China in 2013 is a new experiment in regional cooperation, which aims to improve infrastructure connectivity through investment. This paper investigates whether the BRI created exports for its member states (excluding China), based on a difference-in-differences model. We find a significant causal relationship between the signing of the initiative and the export growth of its member states. In addition to the large export creation between the BRI countries and China (considered as "give-them-a-fish"), export creation also originated from the BRI countries excluding China ("teach-them-to-fish"). Both the intensive and extensive margins are significantly important, indicating that export creation has not just come from expansion of the volume of existing products, but also from new products and new markets. The BRI achieved the goal of mutual benefit mainly through enlisting investment in both publicly funded infrastructure sectors and private sectors. Moreover, the initiative has enhanced the position and participation of its member states in the global value chain.

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Estimates of the Trade and Welfare Effects of NAFTA

Abstract: four anonymous referees and many seminar participants for useful conversations and comments. We thank Zina Saijid for excellent research assistance.

Cited by 430 publications

References 49 publications

Trade Theory with Numbers: Quantifying the Consequences of Globalization

Trade Theory with Numbers: Quantifying the Consequences of Globalization

Sustainable agricultural production, income, and eco‐labeling: What can be learned from a modern Ricardian approach?

Export creation of the Belt and Road Initiative: “Give‐them‐a‐fish” or “Teach‐them‐to‐fish”?

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