This repository contains key elements of the code to replicate results in...
[1] The Elasticity of Trade: Estimates and Evidence, with Ina Simonovska.
Journal of International Economics, 92(1): 34-50. January 2014.
2015 Winner of The Bhagwati Award (selected by the JIE Editorial Board as the best article published in the
JIE during 2013 and 2014).
[2] Trade models, trade elasticities, and the gains from trade, with Ina Simonovska.
No. w20495. National Bureau of Economic Research, 2014.
NOTE: This is not comprehensive (i.e. all datasets, robustness exercises, etc.)
The main driver file is estimate_theta.m It does the following:
First, it loads in the trade data and organizes it in a suitable way for gravity estimation. This later step uses companion code repository on Gravity Estimation. It reads in the set of distance, border from the file dist_cepii.dta and then after adjustment the gravity data set is a N^2 by 5 (where N is the number of countries) in the following order, importer code, exporter code, normalized bilateral trade share, bilateral distance, and a contignuity dummy. stata_to_tau.m calls the STATA and estimates the gravity regression.
Second, given an moment, the biased estimate from, say, Eaton and Kortum (2002), it then finds the theta such that the biased moment from the model matches the one in the data. This is performed in est_fun_exact.m Within this later function, the key piece of code is sim_trade_pattern_ek.m which simulates trade and price data as if Eaton and Kortum (2002) were the data generating process.
Finer points: First, the dataset provided is simply the 30 country data set used in [2]. At some point, the data set from Eaton and Kortum (2002) may be posted. Second, the actual price data used in [1] and [2] is not posted here per our user agreement. In estimate_theta.m I report the moment seen in the data and that is the target. Third, extensions such as over-identified, bootstrap standard errors, other moments are not posted here. They may be at some point.