A Practical Guide to
Trade Policy Analysis

Despite the growing use of quantitative economics in policymaking, existing publications do not directly address the full range of practical questions researchers and policymakers might face when analyzing trade policies. These issues include matters as simple as where to find the best trade and tariff data and how to develop a country’s basic statistics on trade. Other more complicated issues include the choice of the best analytical tools for answering questions ranging from the economic impact of membership in trade agreements, to how trade affect income distribution within a country.

This book aims at filling this gap by discussing the quantification of trade flows and trade policies and reviewing the gravity model, used to assess the determinants and patterns of trade, including the trade effects of certain trade policies. The book also presents a number of simulation methodologies, which can be used to “predict” the effects of trade and trade-related policies on trade flows, on welfare, and on the distribution of income.


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This practical guide is targeted at economists with basic training and some experience in applied research and analysis. More specifically, on the economics side, a basic knowledge of international trade theory and policy is required, while on the empirical side, the prerequisite is familiarity with work on databases and with the use of STATA® (10 and above) software.

Before extracting Stata do files and datasets, please read and follow the instructions contained in "How to use the application and exercise files."