Working Paper: NBER ID: w8675
Authors: James Harrigan
Abstract: The core subjects of trade theory are the pattern and volume of trade: which goods are traded by which countries, and how much of those goods are traded. The first part of the paper discusses evidence on comparative advantage, with an emphasis on carefully connecting theory models to data analyses. The second part of the chapter first considers the theoretical foundations of the gravity model, and then reviews the small number of papers that have tried to test, rather than simply use, the implications of gravity. Both parts of the paper yield the same conclusion: we are still in the very early stages of empirically understanding specialization and the volume of trade, but the work that has been done can serve as a starting point for further research.
Keywords: No keywords provided
JEL Codes: F1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| comparative advantage (F11) | trade flows (F10) |
| autarky prices (P22) | trade flows (F10) |
| comparative advantage (F11) | autarky prices (P22) |
| trade policies and market conditions (F13) | trade flows (F10) |