Measuring the Unequal Gains from Trade
Coauthor(s): Pablo Fajgelbaum.
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Individuals that consume different baskets of goods are differentially affected by relative price changes caused by international trade. We develop a methodology to measure the unequal gains from trade across consumers within countries. The approach requires data on aggregate expenditures and parameters estimated from a non-homothetic gravity equation. We find that trade typically favors the poor, who concentrate spending in more traded sectors.
Fajgelbaum, Pablo, and Amit Khandelwal. "Measuring the Unequal Gains from Trade." Columbia Business School, August 2015.