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Latent Exports: Almost Ideal Gravity and Zeros / James E. Anderson, Penglong Zhang.
- Format:
- Book
- Author/Creator:
- Anderson, James E.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w28278.
- NBER working paper series no. w28278
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2020.
- Summary:
- Almost Ideal gravity associates zero trade flows with variable and fixed trade cost variation in a flexible demand system. Latent trade shares between non-partners are inferred from the Tobit estimator applied to trade among 75 countries and 25 sectors in 2006. Latent Trade Bias (LTB) is the difference between the latent trade share and the as-if-frictionless trade share. Explained LTB variance decomposition shows 52% due to variation of variable trade cost, 24% due to non-homothetic income effects, and 24% due to fixed trade cost effects. Counterfactual variable (fixed) cost reductions suggest cases of successful export promotion between non-partners.
- Notes:
- Print version record
- December 2020.
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