10.17889/E109451
Waugh, Michael E.
Replication data for: International Trade and Income Differences
ICPSR Inter-university Consortium for Political and Social Research
2009
10.1257/aer.100.5.2093
10.1257/aer.100.5.2093
V0
I develop a novel view of the trade frictions between rich and poor countries by arguing that to reconcile bilateral trade volumes and price data within a standard gravity model, the trade frictions between rich and poor countries must be systematically asymmetric, with poor countries facing higher costs to export relative to rich countries. I provide a method to model these asymmetries and demonstrate the merits of my approach relative to alternatives in the trade literature. I then argue that these trade frictions are quantitatively important to understanding the large differences in standards of living and total factor
productivity across countries. (JEL F11, F13, F14, O19 )