Taking the measure of things: the role of measurement in EU trade

Abstract

In this paper theoretical and empirical models of intra-industry trade are developed in which economic activities, based on measurement and an associated measurement infrastructure, play a role in creating product variety. The paper discusses how the measurement infrastructure which includes institutions conducting metrological research and standard setting organization reduces transactions costs, especially in markets where differences in product characteristics are important. The theoretical analysis focuses on the public good characteristics of the measurement infrastructure, considering how the infrastructure impacts upon trade in a model based upon product differentiation under monopolistic competition. In the econometric analysis, indicators of the strength of the infrastructure within the EU, both across industries and across countries, suggest that measurement activities are important in determining the extent of bi-lateral EU intra-industry trade. Despite many common elements in the measurement infrastructure across the EU, there is also some evidence of differential access to the infrastructure among EU members.

The economics of metrology: an exploratory study of the impact of measurement science on U.S. productivity

“…Related to the topic of this paper, there have been only a limited number of contributions to the academic literature related to the statistical relationship between measurement science activity and economic activity. 5 These studies include, for example, Temple and Williams (2002) with respect to changes in total factor productivity in the United Kingdom, and Choudhary, Ali, and Zhao (2013) with respect to bilateral trade among European Union countries. 6…”

Standards, learning, and growth inBritain, 1901–2009

“…The standard reference is to Romer, ‘Endogenous technical change’, but in an earlier article Ethier, ‘National and international returns’, employs an essentially similar idea to build on Adam Smith's pronouncements about the importance of the size of the market. For evidence related to the generation of intra‐industry trade, see Choudhary, Temple, and Zhao, ‘Taking the measure’.…”