Working Paper: NBER ID: w18896
Authors: Arnaud Costinot; Andrés Rodríguez-Clare
Abstract: 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.
Keywords: No keywords provided
JEL Codes: F11; F12; F13; F15; F17; F60; F62
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| trade costs (F19) | welfare outcomes (I38) |
| current trade equilibrium (F19) | real income (D31) |
| multiple sectors and intermediate goods (L60) | gains from trade (F11) |