The Long and Short (Run) of Trade Elasticitiest

When countries change most favored nation (MFN) tariffs, part-ners that trade on MFN terms experience plausibly exogenous tariff changes. Using this variation, we estimate the trade elastic-ity at short and long horizons with local projections. We find that the elasticity of tariff-exclusive trade flows is-0.76 in the short run, and approximately-2 in the long run. Our long-run esti-mates are smaller than typical in the literature, and it takes 7 to10 years to converge to the long run, implying that (i) the wel-fare gains from trade are high and (ii) there are substantial con-vexities in the costs of adjusting exports. (JEL C51, F13, F14)