Measuring the Unequal Gains from Trade

@article{Fajgelbaum2013MeasuringTU,
  title={Measuring the Unequal Gains from Trade},
  author={Pablo D. Fajgelbaum and A. Khandelwal},
  journal={Macroeconomics: Prices},
  year={2013}
}
Individuals that consume different baskets of goods are differentially affected by relative price changes caused by international trade. We develop a methodology to measure the unequal gains from trade across consumers within countries. The approach requires data on aggregate expenditures and parameters estimated from a nonhomothetic gravity equation. We find that trade typically favors the poor, who concentrate spending in more traded sectors. JEL Codes: D63, F10, F60. 
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