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  3. American Economic Review: Insights
  4. September 2019
  5. Estimating US Consumer Gains from Chinese Imports

Estimating US Consumer Gains from Chinese Imports

  • Liang Bai
  • Sebastian Stumpner
American Economic Review: Insights
vol. 1, no. 2, September 2019
(pp. 209-24)
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Abstract

We estimate the size of US consumer gains from Chinese imports during 2004–2015. Using barcode-level price and expenditure data, we construct inflation rates under CES preferences, and use Chinese exports to Europe as an instrument. We find significant negative effects of Chinese imports on US prices. This effect is driven by both changes in the prices of existing goods and the entry of new goods, and it is similar across consumer groups by income or region. A simple benchmarking exercise suggests that Chinese imports led to a 0.19 percentage point annual reduction in the price index for consumer tradables.

Citation

Bai, Liang, and Sebastian Stumpner. 2019. "Estimating US Consumer Gains from Chinese Imports." American Economic Review: Insights, 1 (2): 209-24. DOI: 10.1257/aeri.20180358

Additional Materials

JEL Classification

  • E21 Macroeconomics: Consumption; Saving; Wealth
  • E31 Price Level; Inflation; Deflation
  • F14 Empirical Studies of Trade
  • P33 Socialist Institutions and Their Transitions: International Trade, Finance, Investment, Relations, and Aid