Liu, Xiaoyun; Whalley, John; Xin, Xian - In: Economic Modelling 27 (2010) 5, pp. 909-914
The surprisingly high Canada-U.S. border effect estimated by McCallum has been puzzling trade economists in the last ten years. We argue in this paper that conventional estimates of the border effect without consideration of non-tradable goods can overstate the trade reducing effect of the...