Measuring the Unequal Gains from Trade
NBER Working Paper No. 20331
Individuals that consume different baskets of goods are differentially affected by relative price changes caused by international trade. We develop a methodology to measure the unequal gains from trade across consumers within countries. The approach requires data on aggregate expenditures and parameters estimated from a non-homothetic gravity equation. We find that trade typically favors the poor, who concentrate spending in more traded sectors.
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This paper was revised on August 28, 2015
Document Object Identifier (DOI): 10.3386/w20331
Published: Fajgelbaum, Pablo D. and Amit K. Khandelwal (2016), "Measuring the Unequal Gains from Trade," The Quarterly Journal of Economics, 131 (3): 1113-1180.
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