Trade adjustment dynamics and the welfare gains from trade

• 成果类型: Article
• 署名作者: Alessandria, George; Choi, Horag; Ruhl, Kim J.
• 署名单位: University of Rochester; National Bureau of Economic Research; Monash University; University of Wisconsin System; University of Wisconsin Madison
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2021.103458
• 发表日期: 2021
• 关键词: Welfare; firm dynamics; Trade elasticity

摘要

We introduce time and risk into the fixed-variable cost tradeoff in heterogeneous firm trade models: Investing in exporting gradually and stochastically lowers the costs of exporting. In the model, aggregate trade dynamics arise from producer-level decisions to invest in lowering their future variable export costs, and tariff reforms generate time-varying trade elasticities. The gains from reducing tariffs arise from substituting away from firm creation and towards exporting. This substitution is larger when new exporters are smaller and take longer to grow into successful exporters. The welfare gains from reducing tariffs are much larger than the long-run changes in consumption and the welfare gains cannot be recovered from a static model or from formulas based on those models. Comparing steady-state outcomes can predict a welfare loss from reform when the actual change is positive. (C) 2021 Elsevier B.V. All rights reserved.