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Accounting for the new gains from trade liberalization


Hsieh, Chang-Tai; Li, Nicholas; Ossa, Ralph; Yang, Mu-Jeung (2018). Accounting for the new gains from trade liberalization. NBER Working Papers 22069, National Bureau of Economic Research.

Abstract

We challenge the conventional wisdom on the variety and productivity gains from trade liberalization which are commonly referred to as "new" gains from trade. In particular, we show that the import variety gains measured in studies such as Broda and Weinstein (2006) are counteracted by exactly analogous domestic variety losses. Similarly, we show that the domestic productivity gains measured in studies such as Trefler (2004) are counteracted by exactly analogous import productivity losses. We then account for all these gains and losses in an application to the Canada-US Free Trade Agreement and show that Canada actually experienced net "new" losses from trade.

Abstract

We challenge the conventional wisdom on the variety and productivity gains from trade liberalization which are commonly referred to as "new" gains from trade. In particular, we show that the import variety gains measured in studies such as Broda and Weinstein (2006) are counteracted by exactly analogous domestic variety losses. Similarly, we show that the domestic productivity gains measured in studies such as Trefler (2004) are counteracted by exactly analogous import productivity losses. We then account for all these gains and losses in an application to the Canada-US Free Trade Agreement and show that Canada actually experienced net "new" losses from trade.

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2 citations in Microsoft Academic

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:F10, F12, F14
Language:English
Date:January 2018
Deposited On:22 Mar 2017 14:02
Last Modified:05 Feb 2019 15:48
Series Name:NBER Working Papers
Number of Pages:48
Additional Information:Revised version
OA Status:Green
Official URL:http://www.nber.org/papers/w22069.pdf
Related URLs:http://www.nber.org/papers/w22069

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