TY  - JOUR
AU  - Jacks,David S.
AU  - Meissner,Christopher M.
AU  - Novy,Dennis
TI  - Trade Booms, Trade Busts, and Trade Costs
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15267
PY  - 2009
Y2  - August 2009
UR  - http://www.nber.org/papers/w15267
L1  - http://www.nber.org/papers/w15267.pdf
N1  - Author contact info:
David S. Jacks
Department of Economics
Simon Fraser University
8888 University Drive
Burnaby, BC V5A 1S6
CANADA
Tel: 778/782-5392
Fax: 778/782-5944
E-Mail: dsjacks@gmail.com

Christopher M. Meissner
Department of Economics
University of California, Davis
One Shields Avenue
Davis, CA 95616
Tel: +1 (530) 752-3108
Fax: +1 (530) 752-9382
E-Mail: cmmeissner@ucdavis.edu

Dennis Novy
Warwick University
E-Mail: d.novy@warwick.ac.uk
AB  - What has driven trade booms and trade busts in the past and present? We derive a micro-founded measure of trade frictions from leading trade theories and use it to gauge the importance of bilateral trade costs in determining international trade flows. We construct a new balanced sample of bilateral trade flows for 130 country pairs across the Americas, Asia, Europe, and Oceania for the period from 1870 to 2000 and demonstrate an overriding role for declining trade costs in the pre-World War I trade boom. In contrast, for the post-World War II trade boom we identify changes in output as the dominant force. Finally, the entirety of the interwar trade bust is explained by increases in trade costs.
ER  -