Are We Underestimating the Gains from Globalization for the United States?

Abstract

Over the last three decades, trade has more than tripled the variety of international goods available to U.S. consumers. Although an increased choice of goods clearly enhances consumer well-being, standard national measures of welfare and prices do not assign a value to variety growth. This analysis - the first effort to measure such gains - finds that the value to consumers of global variety growth in the 1972-2001 period was roughly $260 billion.

Keywords: globablization, gains from trade, trade growth, variety growth

JEL Classification: F02, F14, F43