scholarly journals A Spatial Theory of Trade

2005 ◽  
Vol 95 (5) ◽  
pp. 1464-1491 ◽  
Author(s):  
Esteban Rossi-Hansberg
Keyword(s):  
Economic Activity ◽  
Spatial Theory ◽  
Transport Costs ◽  
Trade Patterns ◽  
Production Externalities ◽  
Trade Model ◽  
Equilibrium Relationship ◽  
Agglomeration Effects ◽  
Trade Frictions ◽  
Different Levels

The equilibrium relationship between trade and the spatial distribution of economic activity is fundamental to the analysis of national and regional trade patterns, as well as to the effect of trade frictions. We study this relationship using a trade model with a continuum of regions, transport costs, and agglomeration effects caused by production externalities. We analyze the equilibrium specialization and trade patterns for different levels of transport costs and externality parameters. Understanding trade via the distribution of economic activity in space naturally rationalizes the evidence on border effects and the “gravity equation.”

scholarly journals On the measurement of trade costs: direct vs. indirect approaches to quantifying standards and technical regulations

2012 ◽  
Vol 11 (3) ◽  
pp. 401-414 ◽  
Author(s):  
NATALIE CHEN ◽  
DENNIS NOVY
Keyword(s):  
Trade Costs ◽  
Trade Flows ◽  
Trade Cost ◽  
Policy Makers ◽  
Indirect Approach ◽  
Trade Model ◽  
Observable Data ◽  
Trade Frictions ◽  
Cost Components ◽  
Technical Regulations

AbstractIn this article, we review the literature on the measurement of trade costs in international trade with a special emphasis on non-tariff measures and in particular on standards and technical regulations. We distinguish ‘direct’ from ‘indirect’ approaches. The direct approach collects observable data or proxy variables on trade cost components which are then typically used as regressors in a gravity equation of trade. Instead, the indirect approach infers the extent of trade impediments from trade flows. It compares actual trade flows to the trade flows predicted by a hypothetical frictionless benchmark scenario based on a micro-founded trade model, attributing the deviation of actual from predicted trade flows to trade frictions. We argue that economists and policy-makers can gain useful insights from both approaches.

scholarly journals External Economies and International Trade Redux: Comment*

2013 ◽  
Vol 128 (4) ◽  
pp. 1895-1905 ◽  
Author(s):  
Gary Lyn ◽  
Andrés Rodríguez-Clare
Keyword(s):  
International Trade ◽  
Multiple Equilibria ◽  
Mixed Strategy ◽  
Equilibrium Analysis ◽  
Perfect Competition ◽  
Transport Costs ◽  
Trade Patterns ◽  
Strategy Equilibrium ◽  
Pure Strategies ◽  
Alternative Set

Abstract Recently, Gene Grossman and Esteban Rossi-Hansberg (GRH; “External Economies and International Trade: Redux,” Quarterly Journal of Economics 125 [2010], 829–858) proposed a novel way to think about the implications of international trade in the presence of national external economies at the industry level. Instead of perfect competition and two industries, GRH assume Bertrand competition and a continuum of industries. GRH conclude that the equilibrium is unique if transport costs are low, that there is no trade for high transport costs, and that there is no equilibrium in pure strategies when transport costs are intermediate. In this note we reexamine the equilibrium analysis under different transport costs for a single industry (partial equilibrium) version of GRH’s model. We confirm many of GRH’s results, but also find that there are circumstances under which there are multiple equilibria, including equilibria in which trade patterns run counter to “natural” comparative advantage, and also find that there is a profitable deviation to the mixed-strategy equilibrium postulated by GRH for intermediate trading costs. We propose an alternative set of strategies for this case and establish that they constitute an equilibrium.

scholarly journals The Home-Market Effect and Bilateral Trade Patterns

2004 ◽  
Vol 94 (4) ◽  
pp. 1108-1129 ◽  
Author(s):  
Gordon H Hanson ◽  
Chong Xiang
Keyword(s):  
Monopolistic Competition ◽  
Bilateral Trade ◽  
Home Bias ◽  
Differentiated Products ◽  
Home Market ◽  
Transport Costs ◽  
Trade Patterns ◽  
Market Effect ◽  
Market Effects ◽  
Home Market Effects

We develop a monopolistic-competition model of trade with many industries to examine how home-market effects vary with industry characteristics. Industries with high transport costs and more differentiated products tend to be more concentrated in large countries than industries with low transport costs and less differentiated products. We test this prediction using a difference-in-difference gravity specification that controls for import tariffs, importing-country remoteness, home bias in demand, and the tendency for large countries to export more of all goods. We find strong evidence of home-market effects whose intensity varies across industries in a manner consistent with theory.

scholarly journals Determinantes socioeconómicos de la calidad del agua superficial en México

2017 ◽  
Vol 29 (69) ◽  
Author(s):  
María Eugenia Ibarrarán Viniegra ◽  
Alfonso Mendoza Velázquez ◽  
Cristina Pastrana López ◽  
Erika Jazmín Manzanilla Interian
Keyword(s):  
Water Quality ◽  
Water Treatment ◽  
Surface Water ◽  
Economic Activity ◽  
National Development ◽  
Surface Water Quality ◽  
Economic Determinants ◽  
Water Treatment Plants ◽  
Politica Publica ◽  
Different Levels

Resumen: la calidad y la disponibilidad de agua de los ríos en México son cruciales para el desarrollo regional y nacional, pero tienen problemas graves; en 2006, 74 por ciento de las aguas superficiales tenía grados diferentes de contaminación. El objetivo de esta investigación es identificar la influencia de algunas variables socioeconómicas en la calidad del agua superficial en las regiones hidrológicas administrativas, y proponer acciones para mejorarla. Según el análisis econométrico, la actividad económica y la densidad poblacional perjudican la calidad del agua superficial en dichas regiones. Es poco el efecto del aumento de las plantas de tratamiento de agua en cuanto a la contaminación; el incremento en el caudal tratado es contraproducente para la calidad del agua. Estos elementos presentan aspectos importantes para ser abordados por las políticas públicas.Palabras clave: agua superficial; calidad del agua; contaminación de ríos; cuencas hidrológicas; plantas de tratamiento de agua; política pública; modelos econométricos. Socio-economic determinants of surface water quality in MexicoAbstract: the quality and availability of water in Mexican rivers is critical for regional and national development, but they pose serious problems. In 2006, 74 percent of the surface water in Mexico had different levels of pollution. The objective of this research is to identify the influence of socioeconomic variables in surface water quality on each of the hydrological-administrative regions (hars) and to propose actions in order to improve its quality. After an econometric analysis, results show that surface water quality in the different hars is affected by economic activity and population density. On the other hand, the increase of water treatment plants has little impact on reducing water pollution and the increase of treated water shows a counterproductive effect on water quality. All of these aspects should be considered when designing public policy.Key words: surface water; water quality; pollution of rivers; water basins; water treatment plants; public policy; econometric models.

Agglomeration, Tax Differentials, and the Mobility of Professional Athletes

2016 ◽  
Vol 45 (2) ◽  
pp. 283-302 ◽  
Author(s):  
Grant A. Driessen ◽  
Steven M. Sheffrin
Keyword(s):  
Tax Policy ◽  
Residential Location ◽  
Professional Athletes ◽  
Location Decisions ◽  
Tax Rates ◽  
Limit States ◽  
Residential Patterns ◽  
Agglomeration Effects ◽  
Residential Location Decisions ◽  
Different Levels

Interstate mobility may limit states’ ability to choose their desired tax policies. The forces of agglomeration, however, may allow states more leeway in setting tax rates. Moreover, mobility and agglomeration effects are not uniform for all individuals within a state and may vary significantly across different groups. We explore this heterogeneity by examining the residential location decisions of professional racecar drivers and golfers, which have similar industry characteristics but different levels of agglomeration. Consistent with our theory, we show that tax preferences are a powerful determinant of golfer residential patterns, while agglomeration mitigates much of this effect among racecar drivers. These findings highlight the need to better understand how competition and agglomeration interact when formulating tax policy.

scholarly journals Optimal Transport Networks in Spatial Equilibrium

Econometrica ◽  
2020 ◽  
Vol 88 (4) ◽  
pp. 1411-1452
Author(s):  
Pablo D. Fajgelbaum ◽  
Edouard Schaal
Keyword(s):  
General Equilibrium ◽  
Optimal Transport ◽  
Transport Network ◽  
Increasing Returns ◽  
Spatial Equilibrium ◽  
Transport Costs ◽  
Transport Networks ◽  
The Road ◽  
Trade Model ◽  
Optimal Investments

We study optimal transport networks in spatial equilibrium. We develop a framework consisting of a neoclassical trade model with labor mobility in which locations are arranged on a graph. Goods must be shipped through linked locations, and transport costs depend on congestion and on the infrastructure in each link, giving rise to an optimal transport problem in general equilibrium. The optimal transport network is the solution to a social planner's problem of building infrastructure in each link. We provide conditions such that this problem is globally convex, guaranteeing its numerical tractability. We also study cases with increasing returns to transport technologies in which global convexity fails. We apply the framework to assess optimal investments and inefficiencies in the road networks of European countries.

scholarly journals Yield Variability and Agricultural Trade

2009 ◽  
Vol 38 (2) ◽  
pp. 258-270 ◽  
Author(s):  
Jeffrey J. Reimer ◽  
Man Li
Keyword(s):  
Crop Yield ◽  
Low Income ◽  
Bilateral Trade ◽  
Agricultural Trade ◽  
Trade Costs ◽  
Low Income Countries ◽  
Yield Variability ◽  
Trade Patterns ◽  
Trade Model ◽  
Cereal Grain

We examine how changes in yield variability affect the welfare of cereal grain and oilseed buyers and producers around the world. We simulate trade patterns and welfare for 21 countries with a Ricardian trade model that incorporates bilateral trade costs and crop yield distributions. The model shows that world trade volumes would need to increase substantially if crop yield variability were to rise. Net welfare effects, however, are moderate so long as countries do not resort to policies that inhibit trade, such as export restrictions or measures to promote self-sufficiency in crops. Low-income countries suffer the most from increases in yield variability, due to higher bilateral trade costs and lower-than-average productivity.

The Role of Time Preferences in Explaining the Long-Term Pattern of International Trade

2014 ◽  
Vol 15 (1) ◽  
pp. 83-106 ◽  
Author(s):  
Marian Leimbach ◽  
Lavinia Baumstark ◽  
Gunnar Luderer
Keyword(s):  
Economic Growth ◽  
International Trade ◽  
Current Account ◽  
Empirical Data ◽  
Time Preference ◽  
Time Preferences ◽  
Trade Patterns ◽  
Applied Model ◽  
Trade Model

Globalization is accompanied by increasing current account imbalances. They can undermine the positive impacts of increasing international cooperation and trade on economic growth. By applying an economic growth model that requests for long-term compensation of short-term current account deficits, we derive patterns of international trade. Model output, however, is challenged by empirical data – which is related to the Lucas Paradox. This paper demonstrates how, based on the assumption of differentiated time preferences, model results and empirical data are reconciled with each other. The method presented here yields an indirect estimate of the rates of time preference across regions. Our results suggest that the time preference rate is low in emerging Asian countries, while the USA and Europe are characterized by above world-average rates. Based on the applied model that differentiates between trade in energy resources and a composite good, simulated trade patterns of these three world regions significantly differ from each other and also from trade patterns that occur in resource exporting countries.

scholarly journals Progress in Water Footprint Assessment: Towards Collective Action in Water Governance

Water ◽  
2019 ◽  
Vol 11 (5) ◽  
pp. 1070 ◽  
Author(s):  
Arjen Y. Hoekstra ◽  
Ashok K. Chapagain ◽  
Pieter R. van Oel
Keyword(s):  
Collective Action ◽  
Supply Chains ◽  
Water Footprint ◽  
Water Governance ◽  
Future Research ◽  
Trade Patterns ◽  
Interdisciplinary Field ◽  
Production And Consumption ◽  
Freshwater Use ◽  
Different Levels

We introduce ten studies in the field of water footprint assessment (WFA) that are representative of the type of papers currently being published in this broad interdisciplinary field. WFA is the study of freshwater use, scarcity, and pollution in relation to consumption, production, and trade patterns. The reliable availability of sufficient and clean water is critical in sustaining the supply of food, energy, and various manufactured goods. Collective and coordinated action at different levels and along all stages of commodity supply chains is necessary to bring about more sustainable, efficient, and equitable water use. In order to position the papers of this volume, we introduce a spectrum for collective action that can give insight in the various ways different actors can contribute to the reduction of the water footprint of human activities. The papers cover different niches in this large spectrum, focusing on different scales of governance and different stages in the supply chain of products. As for future research, we conclude that more research is needed on how actions at different spatial levels and how the different players along supply chains can create the best synergies to make the water footprint of our production and consumption patterns more sustainable.

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