The Elasticity of Trade: Estimates and Evidence
With Ina Simonovska. This Version: December 2009.
Specialization, Economic Development and Aggregate Productivity Differences
With David Lagakos. This Version: November 2009.
International Trade and Income Differences
The link above takes you to the latest (September 2009) version.
My job market paper version is available here .
Related: An illustration and explanation of the pattern of bilateral trade.
Product Quality, Human Capital, and Bilateral Trade
Finally a Draft!!!
Abstract: In this paper, I develop a quantitative, general equilibrium theory of product quality and international trade. In the model, producers make choices regarding the quality/technology of their intermediate inputs given the set of endowments they have access to. This choice affects the producers ability to produce goods domestically and internationally, thus shaping the pattern of bilateral trade. In otherwise identical countries, optimizing behavior results in: (i) the high human capital country importing a relatively small volume of goods from the low human capital country and (ii) the low human capital country importing a relatively large volume of goods from the high human capital country --- qualitatively consistent with the observed volume of bilateral trade between rich and poor countries. I quantify the theory for a sample of 77 countries and show that it explains up to 90 percent of the variation in bilateral trade; twice the amount of alternative models with no role for human capital and product quality.
Bilateral Trade, Relative Prices, and Trade Costs
This Version: November 2007, Former title ``Asymmetric Trade Costs and Bilateral Trade'',
Abstract: Poor countries import a larger volume of goods from rich countries, than rich countries
import from poor countries. Furthermore, there is little difference in comparable price indices
for tradable goods between rich and poor countries. Standard empirical implementation of
structural gravity models with distance and other symmetric relationships for trade costs cannot
account for both of these facts. To account for these facts, I argue that trade costs must be
systematically asymmetric with poor countries facing higher costs to export relative to rich
countries. I then demonstrate that asymmetry is quantitatively important accounting for at
least a third of the variation in bilateral trade --- on par or more important than distance and
other symmetric relationships. Given these observations, I propose a trade cost function and
demonstrate how it can reconcile the discrepancy between the results of Eaton and Kortum
(2001) and Hsieh and Klenow's (2007) observations regarding cross-country differences in the
price of investment goods.
Work In Progress:
Minimum Consumption, Uncertainty, and Income Differences (with B. Ravikumar)
On the Cross-Country Distribution of Welfare Gains from Trade (with B. Ravikumar)