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Tariffs, Trade and Productivity: A Quantitative Evaluation of Heterogeneous Firm Models

Breinlich, Holger and Cuñat, Alejandro (2016) 'Tariffs, Trade and Productivity: A Quantitative Evaluation of Heterogeneous Firm Models.' Economic Journal, 126 (595). pp. 1660-1702. ISSN 0013-0133

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Abstract

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.

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 07 Jul 2015 08:53
Last Modified: 11 Nov 2016 02:00
URI: http://repository.essex.ac.uk/id/eprint/14247

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