Jaravel, Xavier ORCID: 0000-0001-9228-2137 and Sager, Erick
(2019)
What are the price effects of trade? Evidence from the US for quantitative trade models.
CEP Discussion Papers.
Centre for Economic Performance, LSE, London, UK.
![]() |
Text (dp1642)
- Published Version
Download (1MB) |
Abstract
This paper finds that U.S. consumer prices fell substantially due to increased trade with China. With comprehensive price micro-data and two complementary identification strategies, we estimate that a 1pp increase in import penetration from China causes a 1.91% decline in consumer prices. This price response is driven by declining markups for domestically-produced goods, and is one order of magnitude larger than in standard trade models that abstract from strategic price-setting. The estimates imply that trade with China increased U.S. consumer surplus by about $400,000 per displaced job, and that product categories catering to low-income consumers experienced larger price declines.
Item Type: | Monograph (Discussion Paper) |
---|---|
Official URL: | http://cep.lse.ac.uk/_new/publications/series.asp?... |
Additional Information: | © 2019 The Authors |
Divisions: | Economics |
Subjects: | H Social Sciences > HF Commerce H Social Sciences > HC Economic History and Conditions |
JEL classification: | F - International Economics > F1 - Trade > F10 - General F - International Economics > F1 - Trade > F13 - Commercial Policy; Protection; Promotion; Trade Negotiations; International Trade Organizations F - International Economics > F1 - Trade > F14 - Country and Industry Studies of Trade |
Date Deposited: | 17 Feb 2020 11:15 |
Last Modified: | 11 Dec 2024 19:33 |
URI: | http://eprints.lse.ac.uk/id/eprint/103402 |
Actions (login required)
![]() |
View Item |