Trade Theory with Numbers: Quantifying the Consequences of Globalization
Author(s)Costinot, Arnaud; Rodríguez-Clare, Andrés
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We review a recent body of theoretical work that aims to put numbers on the consequences of globalization. A unifying theme of our survey is methodological. We rely on gravity models and demonstrate how they can be used for counterfactual analysis. We highlight how various economic considerations—market structure, firm-level heterogeneity, multiple sectors, intermediate goods, and multiple factors of production—affect the magnitude of the gains from trade liberalization. We conclude by discussing a number of outstanding issues in the literature as well as alternative approaches for quantifying the consequences of globalization.
DepartmentMassachusetts Institute of Technology. Department of Economics
Handbook of International Economics
Costinot, Arnaud, and Andrés Rodríguez-Clare. “Trade Theory with Numbers: Quantifying the Consequences of Globalization.” Handbook of International Economics (2015): 197–261.
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