Econometrica

Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Jan, 2025, Volume 93, Issue 1

The Margins of Trade

https://doi.org/10.3982/ECTA17510
p. 129-160

Ana Cecília Fieler|Jonathan Eaton

Welfare depends on the quantity, quality, and range of goods consumed. We use trade data, which report the quantities and prices of the individual goods that countries exchange, to learn about how the gains from trade and growth break down into these different margins. Our general equilibrium model, in which both quality and quantity contribute to consumption and to production, captures (i) how prices increase with importer and exporter per capita income, (ii) how the range of goods traded rises with importer and exporter size, and (iii) how products traveling longer distances have higher prices. Our framework can deliver a standard gravity formulation for total trade flows and for the gains from trade. We find that growth in the extensive margin contributes to about half of overall gains. Quality plays a larger role in the welfare gains from international trade than from economic growth due to selection.


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Supplemental Material

Supplement to "The Margins of Trade"

Ana Cecília Fieler and Jonathan Eaton

Supplemental Appendix

Supplement to "The Margins of Trade"

Ana Cecília Fieler and Jonathan Eaton

The replication package for this paper is available at https://doi.org/10.5281/zenodo.13844850. The authors were granted an exemption to publish parts of their data because either access to these data is restricted or the authors do not have the right to republish them. Therefore, the replication package only includes the codes and the parts of the data that are not subject to the exemption. However, the authors provided the Journal with (or assisted the Journal to obtain) temporary access to the restricted data. The Journal checked the provided and restricted data and the codes for their ability to reproduce the results in the paper and approved online appendices.
 

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