Bernhard Harms Prize Award Ceremony 2006
The Bernhard Harms Prize 2006 was awarded to Professor Robert Feenstra from the University of California at Davis in a Ceremony held at the Kiel Institute on September 15, 2006.
Robert Feenstra receives Berhard-Harms-Prize from Kiel Institute´s
president Dennis Snower
In his laudation Dennis Snower, president of the Kiel Institute, emphasized the numerous contributions that Robert Feenstra has made to the progress of international economics:
"Robert Feenstra contributed to the theory of international trade and developed new empirical models, he created a superb database, he published important empirical studies with high relevance for economic policy, he set a new standard in teaching international trade at an advanced level, and he supported other researchers in the field through organizing first-class networks and review processes".
In his Bernhard Harms Lecture "New Evidence on the Gains from Trade" Robert Feenstra dealt with three sources of gains from trade predicted by the models of monopolistic competition: first, a fall in prices after tariff reductions due to greater competition between firms; second, an increase in the variety of products available to consumers, allowing for further gains; and third, self-selection of firms with only the more efficient firms surviving after trade liberalization. The first source of gains from trade — due to reduced prices — has the least empirical support to date. There is little direct evidence to support the idea that firms expand their output following trade liberalization and enjoy economies of scale, leading to lower prices. In contrast, the second source of gain from trade — due to increased product variety — has received a good deal of support in current research using disaggregate data. New statistical methods allow to estimate the degree of substitution between product varieties across countries, and with those elasticities of substitution, measure the consumer gains from importing more product varieties. These gains are substantial for the United States, the country that has received the most study, and are potentially even larger for many other countries with a higher ratio of trade to GDP, such as in Europe. The third source of gains from trade — due to the self-selection of firms — has also received overwhelming support from recent studies.
Robert Feenstra delivers Berhard Harms Lecture 2006
The full text of the Harms-Prize Lecture is published in issue no. 4, 2006 of Review of World Economics /Weltwirtschaftliches Archiv.