Understanding Interstate Trade Patterns

26 Pages Posted: 22 Jun 2007 Last revised: 19 Dec 2011

See all articles by HAKAN YILMAZKUDAY

HAKAN YILMAZKUDAY

Florida International University (FIU) - Department of Economics

Date Written: December 1, 2011

Abstract

This paper models and estimates bilateral trade patterns of U.S. states in a CES framework and identifies the elasticity of substitution across goods, the elasticities of substitution across varieties of each good, and the good-specific elasticities of distance by using markup values obtained from the production side. Compared to the international trade literature, the elasticity of substitution estimates are lower across both goods and varieties, while the elasticity of distance estimates are higher. Although home-bias effects at the state level are significant, there is evidence for decreasing effects over time.

Keywords: Trade Ratios, Transportation, The United States

JEL Classification: R12, R13, R32

Suggested Citation

Yilmazkuday, Hakan, Understanding Interstate Trade Patterns (December 1, 2011). Journal of International Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=995542

Hakan Yilmazkuday (Contact Author)

Florida International University (FIU) - Department of Economics ( email )

11200 SW 8th Street
Miami, FL 33199
United States

HOME PAGE: http://faculty.fiu.edu/~hyilmazk/

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