Global production sharing and the measurement of price elasticity in international trade

    Research output: Contribution to journalArticle

    Abstract

    The implications of global production sharing for the measurement of price elasticity in international trade is examined using a unique dataset relating to manufacturing imports of the USA. There is strong evidence that parts and components, which account for a growing share of manufacturing trade, are remarkably less sensitive to changes in relative prices compared to final goods. This finding casts doubt on the conventional approach to trade flow modelling that treats parts and components and finals goods as a unified product.
    Original languageEnglish
    Pages (from-to)27-30
    JournalEconomics Letters
    Volume139
    DOIs
    Publication statusPublished - 2016

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