The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Trade Costs

  • Jeffrey H. Bergstrand
Reference work entry


Trade costs refer to the additional costs paid potentially by the final consumer of a good or service beyond the price at which a producer sells a good. In international trade, such costs may include the transport cost from origin to destination, taxes (or tariffs) imposed by importing nations’ governments, the costs of infrastructure to facilitate trade, the costs of communications, and foreign exchange costs.


Communication costs Currency unions Distance Economic geography Exchange rate volatility Factor content of trade Foreign direct investment Foreign exchange costs Gravity equation Information costs Outsourcing Portfolio flows Regional trade agreements Rent seeking Sticky prices Tariffs Trade costs 

JEL Classifications

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Jeffrey H. Bergstrand
    • 1
  1. 1.