TY  - JOUR
AU  - Feenstra,Robert C.
TI  - Estimating the Effects of Trade Policy
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5051
PY  - 1995
Y2  - March 1995
UR  - http://www.nber.org/papers/w5051
L1  - http://www.nber.org/papers/w5051.pdf
N1  - Author contact info:
Robert C. Feenstra
Department of Economics
University of California, Davis
One Shields Avenue
Davis, CA  95616
Tel: 530/752-7022
Fax: 530/752-9382
E-Mail: rcfeenstra@ucdavis.edu
AB  - This paper reviews empirical methods used to estimate the impact of trade policies under imperfect competition.  We decompose the welfare effects of trade policy into four possible channels: (i) a deadweight loss from distorting consumption and production decisions; (ii) a possible gain from improving the terms of trade; (iii) a gain or loss due to changes in the scale of firms; and, (iv) a gain or loss from shifting profits between countries.  For each channel, we discuss the appropriate empirical methods to determine the sign or magnitude of the effect, and illustrate the results using recent studies.  Two other channels by which trade policy affects social or individual welfare - through changes in wages and changes in product variety - are discussed more briefly.  Recent developments in the analysis of trade policies under perfect competition are also reviewed.
ER  -