Welfare gains achieved through international trade are a cornerstone of the literature on international economics. However, the data and research methods needed to empirically assess these welfare gains have only recently become available. Building on recently developed methodologies for estimating the elasticity of substitution and computing welfare gains from trade, we estimate Japan's welfare gains from liberalizing trade in the manufacturing sector. To do so, we estimate the elasticities of substitution using Japanese customs data at Harmonized System (HS) 9-digit product codes. The analysis shows that Japan's welfare gains from trade liberalization occurred especially from the end of the 1990s onward, and reached 16 percent vis-à-vis the autarky situation.
|Journal of The Japanese and International Economies
|Published - 2022 Jun
- Trade liberalization
- Welfare gains
ASJC Scopus subject areas
- Economics and Econometrics
- Political Science and International Relations