Quantitative Economics
Journal Of The Econometric Society
Edited by: Stéphane Bonhomme • Print ISSN: 1759-7323 • Online ISSN: 1759-7331
Edited by: Stéphane Bonhomme • Print ISSN: 1759-7323 • Online ISSN: 1759-7331
Quantitative Economics: May, 2024, Volume 15, Issue 2
https://doi.org/10.3982/QE1994
p. 453-487
Peter H. Egger, Katharina Erhardt
Structural quantitative work in international economics typically models trade costs as a log‐linear function of exogenous trade‐policy variables. We propose a structural approach that allows for a nonparametric relationship and for treating tariff and nontariff trade‐policy variables as potentially endogenous. The data reject the assumption of log‐linearity of trade costs in both tariff‐ and nontariff‐policy variables. We assess the effects of a unilateral increase of US tariffs on Chinese imports by 10 percentage points and document that the estimated effects on real bilateral trade‐flow changes would be substantially underestimated by standard approaches.
Peter H. Egger and Katharina Erhardt
This appendix contains material not found within the manuscript.
Peter H. Egger and Katharina Erhardt
The replication package for this paper is available at https://doi.org/10.5281/zenodo.10489950. The Journal checked the data and codes included in the package for their ability to reproduce the results in the paper and approved online appendices.
August 27, 2024