The round trip effect: Endogenous transport costs and international trade
By: Wong, Woan Foong
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Material type: 
BookPublisher: American Economic Journal: Applied Economics Description: 14(4), Oct, 2022: p.127-166.
In:
American Economic Journal: Applied EconomicsSummary: Container ships travel between a fixed set of origins and destinations in round trips, inducing a negative correlation in their freight rates. I study the implications of this round trip effect on international trade and trade policy. I identify this effect and develop an instrument using it to estimate the impact of transport costs on trade. I simulate counterfactual import tariff increases in a quantitative model and quantify the importance of endogenizing transport costs with respect to this effect: an exogenous transport costs model predicts a trade balance improvement from protectionist policies, while the round trip model finds the opposite. – Reproduced
| Item type | Current location | Call number | Vol info | Status | Date due | Barcode |
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Articles
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Indian Institute of Public Administration | 14(4), Oct, 2022: p.127-166 | Available | AR127562 |
Container ships travel between a fixed set of origins and destinations in round trips, inducing a negative correlation in their freight rates. I study the implications of this round trip effect on international trade and trade policy. I identify this effect and develop an instrument using it to estimate the impact of transport costs on trade. I simulate counterfactual import tariff increases in a quantitative model and quantify the importance of endogenizing transport costs with respect to this effect: an exogenous transport costs model predicts a trade balance improvement from protectionist policies, while the round trip model finds the opposite. – Reproduced
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