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Trade Costs and the Gains from Trade in Crop Agriculture
Author(s) -
Reimer Jeffrey J.,
Li Man
Publication year - 2010
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aaq046
Subject(s) - openness to experience , comparative advantage , economics , globalization , agriculture , productivity , trade barrier , economic integration , international economics , distribution (mathematics) , gains from trade , international trade , macroeconomics , geography , psychology , social psychology , mathematical analysis , mathematics , archaeology , market economy
We develop a simulation model of world crop markets that is based upon Ricardian comparative advantage. We apply the model to twenty‐three countries and provide measures of the degree of globalization in this sector, the gains from trade, and the elasticity of trade volumes to trade costs. The distribution of the gains from trade across countries is uneven due to important differences in openness to imports, productivity, and other factors, some of which appear to be related to a country's level of development. Distance limits the extent by which changes in one country are transmitted to others.