Trade Theory with Numbers: Quantifying the Consequences of Globalization
Open accessAbstract
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 considerationsmarket 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.
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The quantitative predictions of gravity models hinge on two key elasticities: trade elasticities and scale elasticities.
“As discussed by Costinot and Rodríguez-Clare (2013) and Kucheryavyy et al. (2017), the quantitative predictions of these models hinge on two key elasticities: trade elasticities and scale elasticities.”
From The Textbook Case for Industrial Policy: Theory Meets Data (2019) · cites this paper as Costinot and Rodríguez-Clare (2013)
Within standard gravity models, Costinot and Rodríguez-Clare (2013) find that the terms-of-trade manipulation channel is extremely weak even for the largest countries.
“However, within the class of standard gravity models,Costinot and Rodríguez-Clare (2013) find that this channel is extremely weak even for the largest countries.”
From The Textbook Case for Industrial Policy: Theory Meets Data (2019) · cites this paper as Costinot and Rodríguez-Clare (2013)
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Climate Clubs: Overcoming Free-riding in International Climate Policy
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Globalization, inequality and welfare
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Estimating the Armington elasticity: The importance of study design and publication bias
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The Textbook Case for Industrial Policy: Theory Meets Data
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Self-citationQuantifying the partial and general equilibrium effects of sanctions on Russia
Flach, L., Heiland, I., Larch, M., Steininger, M., & Teti, F. A. (2024) · Review of International Economics · doi:10.1111/roie.12707 · Cited by 20 · see citing works
- Authors
- Costinot, A., & Rodríguez-Clare, A.
- Affiliations
- National Bureau of Economic Research (US)
- Venue
- National Bureau of Economic Research
- Publisher
- National Bureau of Economic Research
- Published
- 2013-03
- OpenAlex
- W1512004333
- Cited by
- 501
- References
- 5
- Citations by year
- 2026: 5 · 2025: 16 · 2024: 25 · 2023: 34 · 2022: 25 · 2021: 45 · 2020: 61 · 2019: 55 · 2018: 51 · 2017: 58 · 2016: 43 · 2015: 50 · 2014: 21 · 2013: 8 · 2012: 2
- Type
- report
- Language
- en
- Open access
- green
- doi.org
- Locations
- National Bureau of Economic Research (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- DSpace@MIT (Massachusetts Institute of Technology) (submittedVersion, cc-by-nc-sa)
- Topics
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Globalization, Economics, and Policies
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic Growth and Productivity
- Keywords
- trade theory, globalization, trade liberalization, gains from trade, gravity model, counterfactual analysis, market structure, firm heterogeneity, intermediate goods, sectoral trade
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