Novy, Dennis (2012) Gravity redux: measuring international trade costs with panel data. CEP Discussion Papers (CEPDP1114). London School of Economics and Political Science. Centre for Economic Performance, London, UK.
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Abstract
Barriers to international trade are known to be large but due to data limitations it is hard to measure them directly for a large number of countries over many years. To address this problem I derive a micro-founded measure of bilateral trade costs that indirectly infers trade frictions from observable trade data. I show that this trade cost measure is consistent with a broad range of leading trade theories including Ricardian and heterogeneous firms models. In an application I show that U.S. trade costs with major trading partners declined on average by about 40 percent between 1970 and 2000, with Mexico and Canada experiencing the biggest reductions.
| Item Type: | Monograph (Discussion Paper) |
|---|---|
| Official URL: | https://cep.lse.ac.uk/_new/publications/discussion... |
| Additional Information: | © 2012 The Author(s) |
| Divisions: | Centre for Economic Performance |
| Subjects: | H Social Sciences > HC Economic History and Conditions |
| JEL classification: | F - International Economics > F1 - Trade > F10 - General F - International Economics > F1 - Trade > F15 - Economic Integration |
| Date Deposited: | 22 Feb 2024 12:48 |
| Last Modified: | 11 Sep 2025 05:16 |
| URI: | http://eprints.lse.ac.uk/id/eprint/121749 |
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