Measured Aggregate Gains from International Trade
- (pp. 181-218)
Abstract
We examine the implications of workhorse trade models for how aggregate productivity, real GDP and real consumption, as measured by statistical agencies, respond to changes in trade costs. In a range of models, changes in measured productivity are equal to the inverse of an export-share weighted average of changes in variable trade costs incurred domestically. Under certain conditions, despite the multiple biases in the CPI, measured real consumption captures the first-order effects of changes in variable trade costs on welfare. Through the lens of these results, we interpret some of the empirical work on measured gains from trade. (JEL E21, E23, F11, F43)Citation
Burstein, Ariel, and Javier Cravino. 2015. "Measured Aggregate Gains from International Trade." American Economic Journal: Macroeconomics, 7 (2): 181-218. DOI: 10.1257/mac.20120008Additional Materials
JEL Classification
- E21 Macroeconomics: Consumption; Saving; Wealth
- E23 Macroeconomics: Production
- F11 Neoclassical Models of Trade
- F43 Economic Growth of Open Economies
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