Globalization And The Gains From Variety

"Since the seminal work of Krugman (1979), product variety has played a central role in models of trade and growth. In spite of the general use of love-of-variety models, there has been no systematic study of how the import of new varieties has contributed to national welfare gains in the United States. In this paper we show that the unmeasured growth in product variety from US imports has been an important source of gains from trade over the last three decades (1972-2001). Using extremely disaggregated data, we show that the number of imported product varieties has increased by a factor of four. We also estimate the elasticities of substitution for each available category at the same level of aggregation, and describe their behavior across time and SITC-5 industries. Using these estimates we develop an exact price index and find that the upward bias in the conventional import price index is approximately 1.2 percent per year. The magnitude of this bias suggests that the welfare gains from variety growth in imports alone are 2.8 percent of GDP"--NBER website

An examination of the methods to measure the product variety of imports and the gains from trade due to product variety. The application of the monopolistic competition model to international trade by Elhanan Helpman, Paul Krugman, and Kelvin Lancaster was one of the great achievements of international trade theory in the 1970s and 1980s. Monopolistic competition models have required new empirical methods to implement their theoretical insights, however, and in this book Robert Feenstra describes methods that have been developed to measure the product variety of imports and the gains from trade that are due to product variety. Feenstra first considers the consumer benefits from having access to new import varieties of differentiated products, and examines a recent method to estimate the elasticity of substitution (the extent of differentiation across products) and to use that information to construct the gains from import variety. He then examines claims of producer benefit from export variety, arguing that the self-selection of the more productive firms (as the low-productivity firms exit the market) can be interpreted as a gain from product variety. He makes use of a measurement of product variety known as the extensive margin of exports and imports. Finally, he considers an alternative approach to quantifying the gains due to product variety by comparing real GDP calculated with and without the extensive margin of trade. variety, arguing that the self-selection of the more productive firms (as the low-productivity firms exit the market) can be interpreted as a gain from product variety. He makes use of a measurement of product variety known as the extensive margin of exports and imports. Finally, he considers an alternative approach to quantifying the gains due to product variety by comparing real GDP calculated with and without the extensive margin of trade.

Historically, the challenge for humans has been to secure a sufficient supply of food to stave off hunger and starvation. As a result, much of the research on food and agriculture in the past century has focused on issues related to production efficiency, food supply, and farm profitability. In recent years, however, farmers, agribusiness, policy makers, and academics have increasingly turned their attention away from the farm and toward the food consumer and to issues related to food consumption. This handbook provides an overview of the economics of food consumption and policy and is a useful reference for academics and graduate students interested in food economics and the consumer-end of the supply chain. It is also relevant to those employed in food and agricultural industries, policy makers, and activist groups. The first section covers the application of the core theoretical and methodological approaches of the economics of food consumption and policy. The second part concentrates on policy issues related to food consumption. Several chapters focus on the theoretical and conceptual issues relevant in food markets, such as product bans, labeling, food standards, political economy, and scientific uncertainty. Additional chapters discuss policy issues of particular interest to the consumer-end of the food supply chain, such as food safety, nutrition, food security, and development. The final section serves as an introduction to particular issues and current topics in food consumption and policy.

An updated look at global trade and why it remains as controversial as ever Free trade is always under attack, more than ever in recent years. The imposition of numerous U.S. tariffs in 2018, and the retaliation those tariffs have drawn, has thrust trade issues to the top of the policy agenda. Critics contend that free trade brings economic pain, including plant closings and worker layoffs, and that trade agreements serve corporate interests, undercut domestic environmental regulations, and erode national sovereignty. Why are global trade and agreements such as the Trans-Pacific Partnership so controversial? Does free trade deserve its bad reputation? In Free Trade under Fire, Douglas Irwin sweeps aside the misconceptions that run rampant in the debate over trade and gives readers a clear understanding of the issues involved. In its fifth edition, the book has been updated to address the sweeping new policy developments under the Trump administration and the latest research on the impact of trade.

International Economics, 13th Edition provides students with a comprehensive, up-to-date review of the field’s essential principles and theory. This comprehensive textbook explains the concepts necessary to understand, evaluate, and address the economic problems and issues the nations of the world are currently facing, and are likely to face in the future. Balancing depth and accessibility, the text helps students identify the real-world relevance of the material through extensive practical applications and examples. The new, thoroughly-updated and expanded edition provides students with a solid knowledgebase in international trade theory and policy, balance of payments, foreign exchange markets and exchange rates, open-economy macroeconomics, and the international monetary system. The text uniquely employs the same graphical and numerical model in chapters that cover the same basic concept, allowing students to recognize the relationship among the different topics without having to start with a new example each time. Clear, straightforward discussions of each key concept and theory are complemented by concrete, accessible, and relatable examples that serve to strengthen student comprehension and retention. Topics include the ‘Great Recession,’ the increase in trade protectionism, excessive volatility and large misalignments of exchange rates, and the impacts of resource scarcity and climate change to continued growth and sustainable development.

This book collects OECD work that builds on recent contributions to the theory and empirics of comparative advantage, putting particular emphasis on the role policy can play in shaping trade.

The economic successes of China and India are viewed with admiration but also with concern because of the effects that the growth of these Asian economies may have on the Latin American and Caribbean (LAC) region. The evidence in 'China's and India's Challenge to Latin America' indicates that certain manufacturing and service industries in some countries have been negatively affected by Chinese and Indian competition in third markets and that LAC imports from China and India have been associated with modest unemployment and adjustment costs in manufacturing industries. The book also provides substantial evidence of positive aggregate effects for LAC economies associated with China's and India's greater presence in world exports, financial flows, and innovation. Chinese and Indian growth is creating new production possibilities for LAC economies, particularly in sectors that rely on natural resources and scientific knowledge.