Simonovska, Ina; Waugh, Michael - 2011 - This Version: November 2011
elasticity of trade with respect to trade frictions. We develop a new simulated method of moments estimator to estimate this … elasticity from disaggregate price and trade-flow data and we use it within Eaton and Kortum's (2002) Ricardian model. We apply … elasticity of roughly four, nearly fifty percent lower than Eaton and Kortum's (2002) approach. Moreover, robustness exercises …