New Trade Models, Same Old Gains?

By Costas Arkolakis, Arnaud Costinot, A. Rodríguez-Clare. 2012

1,809 citations recorded by the source corpus.

Micro-level data have had a profound influence on research in international trade over the last ten years. In many regards, this research agenda has been very successful. New stylized facts have been uncovered and new trade models have been developed to explain these facts. In this paper we investigate to which extent answers to new micro-level questions have affected answers to an old and central question in the field: How large are the gains from trade? A crude summary of our results is: "So far, not much."

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/c1a61c9226d91d2cbaeea7f0c78cc7e3167442ea

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Citations in the corpus

Capital-Skill Complementarity and the Skill Premium in a Quantitative Model of Trade (2013, background): “It adopts a similar functional form to those in other trade models such as Armington (1969), Krugman (1981), Eaton and Kortum (2002), Anderson and van Wincoop (2003), Melitz (2003), Chaney (2008), and the models considered in Arkolakis et al. (2011).”
What Separates Us? Sources of Resistance to Globalization (2013, neutral): “Arkolakis et al. (2012) provide a simple formula we can use for a back-of-the-envelope calculation of these welfare changes.”
Gravity Redux: Estimation of Gravity-Equation Coefficients, Elasticities of Substitution, and General Equilibrium Comparative Statics under Asymmetric Bilateral Trade Costs (2013, methodology): “As Eaton and Kortum (2002) and Arkolakis et al. (2012) note, there is a large class of models with constant-elasticity-ofsubstitution (CES) preferences, iceberg trade costs, and complete specialization that generate isomorphic gravity equations.”
Trade, Domestic Frictions, and Scale Effects (2016, methodology): “We use the same values for Mn, Ln and φn as above and set Tn = φnLn directly from (10).”
Market Penetration Costs and the New Consumers Margin in International Trade (2008, background): “In fact, as shown in Arkolakis et al. (2009), the overall gains from trade can be computed as a function of the market share of domestic goods before and after the trade cost changes, and .”
Exporting and Firm Performance: Evidence from a Randomized Experiment (2017, positive): “In the presence of learning-by-exporting, trade generates efficiency gains which narrow this productivity gap and magnify the gains from trade relative to models without learning, such as those explored by Arkolakis, Costinot, and Rodriguez-Clare (2012) (e.g., see Alvarez, Buera, and Lucas 2013).”
Nonparametric Counterfactual Predictions in Neoclassical Models of International Trade (2017, background): “fail if one were to relax the assumption of perfect competition or introduce distortions— indeed, Arkolakis et al. (2012a) and Arkolakis et al. (2012b) offer examples in this vein that cover a number of influential modeling approaches—but it is fair to say that it is much less likely to be useful in”
Estimates of the Trade and Welfare Effects of NAFTA (2012, neutral): “…goods (services) accounted for more than 80% of the total final goods demanded in the year 1993 for the U.S. 2An exception is the work of Arkolakis, Costinot, and Rodriguez-Clare (2012) where they evaluate the welfare gains from trade openness implied by a variety of international trade…”