Global trade flows and supply chains adjust gradually. Empirical estimates of the trade elasticity for the short run are a fraction of those for the long run and suggest that trade is subject to substantive dynamic frictions. We develop a tractable framework that provides microfoundations for...

We consider five models of international trade that belong to the class of models in which the trade elasticity and domestic trade share are sufficient statistics for the welfare cost of autarky. Three are fixed-variety models featuring increasing micro-level margins of adjustment: versions of...

This paper deepens the analysis of the income elasticities of import and export demand in relation to the real exchange rate (RER) within a balance of payments constrained growth framework. It identifies how the RER can affect these elasticities and explores the resulting implications. A key...

Most empirical estimates of the trade elasticity exploit tariff variation generated by Preferential Trade Agreements (PTAs). Because firms only partly utilize preferential tariffs, standard regressions identify an eligible-tariff elasticity rather than the structural elasticity with respect to...

When the UK left the EU, it introduced a new import tariff schedule, one of the largest MFN tariff reforms in decades of a developed economy. This paper exploits this policy change to estimate the elasticity of imports to MFN tariffs, addressing the endogeneity of trade policy through two...