Tariffs, trade and productivity: a quantitative evaluation of heterogeneous firm models
Holger Breinlich and Alejandro Cu?at
We examine the quantitative predictions of heterogeneous firm in the context of the Canada?US Free Trade Agreement (CUSFTA) of 1989. We compute predicted increases in trade flows and measured productivity and compare them to the post-CUSFTA increases observed in the data. Most models predict increases in measured productivity that are too low by an order of magnitude relative to predicted increases in trade flows. A multi-product firm extension that allows for within-firm productivity increases has the potential to reconcile model predictions with the data. ? 2014 Royal Economic Society
1 September 2016
The Economic Journal 126(595) , pp.1660-1702, 2016
https://academic.oup.com/ej/article/126/595/1660/5077864?searchresult=1
This Journal article is published under the centre's Trade programme.