Essays in international trade

This thesis is a collection of essays on the effect of trade costs on international trade. Chapter 1 derives and empirically examines how factor proportions determine the structure of commodity trade when international trade is costly. It combines a many-country version of the Heckscher-Ohlin model with a continuum of goods developed by Dornbusch-Fischer-Samuelson (1980) with the Krugman (1980) model of monopolistic competition and transport costs. The commodity structure of production and bilateral trade is fully determined. Two main predictions emerge. There is a quasi-Heckscher-Ohlin prediction. Countries capture larger shares of industries that more intensively use their abundant factor. There is a quasi-Rybczynski effect. Countries that rapidly accumulate a factor see their production and export structures systematically move towards industries that intensively use that factor. Both predictions receive support from the data. Factor proportions appear to be an important determinant of the structure of international trade. Chapter 2 focuses on the effect of preferential tariff liberalization on the direction of trade and suggests that NAFTA has had a substantial impact on North American trade. The chapter focuses on where the US sources its imports of different commodities from. It identifies the impact of NAFTA by exploiting the substantial cross-commodity variation in the tariff preference given to goods produced in Canada and Mexico.

Department dc:contributor.department

Massachusetts Institute of Technology. Department of Economics

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2001

Author dc:creator

• Romalis, John

Advisor dc:contributor.advisor

• Jaume Ventura and K. Daron Acemoglu.

• Economics.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/35486

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/35486