NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Why Trade Matters After All

Ralph Ossa

NBER Working Paper No. 18113
Issued in May 2012, Revised in June 2015
NBER Program(s):ITI

I show that accounting for cross-industry variation in trade elasticities greatly magnifies the estimated gains from trade. The main idea is as simple as it is general: While imports in the average industry do not matter too much, imports in some industries are critical to the functioning of the economy, so that a complete shutdown of international trade is very costly overall.

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Document Object Identifier (DOI): 10.3386/w18113

Published: Ralph Ossa, 2015. "Why trade matters after all," Journal of International Economics, vol 97(2), pages 266-277.

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