Non‐discriminatory Trade Policies in Panel Structural Gravity Models: Evidence from Monte Carlo Simulations

Sellner, RichardORCID: https://orcid.org/0000-0001-7519-184X (2019) Non‐discriminatory Trade Policies in Panel Structural Gravity Models: Evidence from Monte Carlo Simulations. Review of International Economics, 27 (3), pp. 854-887. DOI: 10.1111/roie.12401

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Abstract

This paper provides Monte Carlo (MC) simulation evidence on the performance of methods used for identifying the effects of nondiscriminatory trade policy (NDTP) variables in panel structural gravity models. The benchmarked methods include a fixed effect (FE) estimator that utilizes data on intra national trade flows, the bonus‐vetus (BV) and the two‐stage fixed effect (FE‐2S) estimator. The results indicate that only the FE estimates are unbiased and consistent under very general assumptions of the data generating process. The favourable asymptotic properties of the FE estimator unfold as the number of period T increases.

Item Type:	Article in Academic Journal
Keywords:	structural gravity model, nondiscriminatory trade policies, Monte Carlo simulation
Classification Codes (e.g. JEL):	C33, F10, F13
Research Units:	Former Research Units (until 2020) > Macroeconomics and Economic Policy
Related URLs:	Publisher
Date Deposited:	08 Apr 2019 08:16
Last Modified:	16 Sep 2019 08:41
DOI:	10.1111/roie.12401
ISSN:	1467-9396
URI:	https://irihs.ihs.ac.at/id/eprint/4979

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