Working Paper: NBER ID: w8543
Authors: Donald R. Davis; David E. Weinstein
Abstract: In the field of international trade, data analysis has traditionally had quite modest influence relative to that of pure theory. At one time, this might have been rationalized by the paucity of empirics in the field or its weak theoretical foundations. In recent years empirical research has begun to provide an increasingly detailed view of the determinants of trade relations. Yet the field as a whole has been slow to incorporate these findings in its fundamental worldview. In this paper, we outline and extend what we view as key robust findings from the empirical literature that should be part of every international economists working knowledge.
Keywords: No keywords provided
JEL Codes: F1; B4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| lack of empirical integration (F15) | imbalanced understanding of trade determinants (F14) |
| failure of empirical findings to influence theory (B41) | strong theoretical foundation (L10) |
| empirical analysis has traditionally played a marginal role (A11) | limited understanding of trade patterns (F14) |
| failure of the factor price equalization (FPE) theorem (F16) | challenges to existing trade theories (F12) |
| wage disparities across countries (J31) | relevance of comparative advantage (F11) |
| empirical studies provide evidence of multiple cones of diversification (L25) | contradictions to classical models (E14) |
| reluctance to incorporate empirical findings (C59) | sidelining of empirical results that challenge theories (B41) |
| acknowledgment of empirical anomalies (B41) | advancement of the field (O36) |