Decomposing the Growth of Trade 1884-1992
نویسنده
چکیده
This paper uses a Ricardian model of trade to study the growth of international trade from 1884 to 1992. The Dornbusch, Fischer, Samuelson (1977) Ricardian model with a continuum of goods is used following Evenett and Yeung’s (2000) derivation of a relationship between the trade flows and trade impediments. A key supply side parameter is estimated using weighted least squares and correcting for autocorrelation in the residual. This parameter is then used to decompose the growth of trade for five countries, Canada, Denmark, Sweden, the UK, and US. The main result is that trade impediments themselves cannot alone account for the growth of trade. Supply side changes play an important role in the evolution of trade.
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