Unbalanced Trade

Can the terms of trade externality outweigh free-riding? The role of vertical linkages

“…Fig. 5 shows that over a range of empirically reasonable values for β, adopted from Jones (2011) and Dekle et al (2007), this level of pollution can easily be one-and-a-half times as large as in the fully informed non-cooperative outcome.…”

Structural gravity with dummies only: Constrained ANOVA-type estimation of gravity models

“…We set parameters β = −6.5 and γ = 0.3 consistent with Costinot et al (2012), who use productivity data to estimate β for OECD countries, and with Dekle et al (2007), respectively. This system has J × 2 equations and can be solved for J − 1 endogenous wages (relative to the numéraire), w j , and J endogenous prices, p j which can be structurally transformed to the exporter and importer-specific variables as follows:…”

Gravity Redux: Estimation of gravity-equation coefficients, elasticities of substitution, and general equilibrium comparative statics under asymmetric bilateral trade costs

“…In our empirical work later using bilateral trade flows among 10 Canadian provinces and 30 U.S. states, we note now that our 40 observed (or actual) GDPs (Y i ) will not match our 40 endogenous predicted GDPsŶ i owing to multilateral trade imbalances. In the spirit of Dekle et al (2007), we will also generate later endogenous predicted GDPs and trade flows (including predicted trade flows with ROW) to calculate a correction for these imbalances to demonstrate whether or not our general equilibrium comparative static estimates for trade flows and economic welfare are sensitive to such imbalances. 10 For instance, as noted earlier, AvW assumed…”