An Empirical Assessment of the Comparative Advantage Gains from Trade: Evidence from Japan
AbstractWe provide an empirical assessment of the comparative advantage gains from trade argument. We use Japan's nineteenth-century opening up to world commerce as a natural experiment to answer the following counterfactual: "By how much would real income have had to increase in Japan during its final autarky years of 1851–1853 to afford the consumption bundle the economy could have obtained if it were engaged in international trade during that period?" Using detailed historical data on trade flows, autarky prices, and Japan's real GDP, we obtain upper bounds on the gains from trade of about 8 to 9 percent of Japan's GDP.
CitationBernhofen, Daniel, M., and John C. Brown. 2005. "An Empirical Assessment of the Comparative Advantage Gains from Trade: Evidence from Japan." American Economic Review, 95 (1): 208-225. DOI: 10.1257/0002828053828491
- F11 Neoclassical Models of Trade
- F14 Empirical Studies of Trade
- N75 Economic History: Transport, Trade, Energy, Technology, and Other Services: Asia including Middle East