Innovation and the trade elasticity

• 成果类型: Article
• 署名作者: Rubini, Loris
• 署名单位: Universidad Carlos III de Madrid; Pontificia Universidad Catolica de Chile
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2014.04.002
• 发表日期: 2014
• 页码: 32-46
• 关键词: Canada-US Free Trade Agreement; Innovation and trade; Trade elasticity

摘要

The reaction of trade volumes to tariffs is far larger than what current models predict. One reason for this is that they abstract from endogenous productivity choices (innovation), which amplify this reaction. To show this, I develop a model of international trade with innovation, and calibrate it to Canada and United States before the Free Trade Agreement. Feeding in the tariff drops observed during the agreement, the increase in the trade volumes is within the empirical estimates. Without innovation, the change in trade volumes is too low, and similar to what current models without innovation have found. (C) 2014 Elsevier B.V. All rights reserved.