Update trade share matrix for Caliendo and Parro (2015)

Source: R/model_caliendo_parro_2015.R

Compute new trade shares following Caliendo & Parro (2015) equation (12).

update_trade_share_cp_2015(
  trade_share,
  trade_cost_change,
  input_cost_change,
  price_change,
  trade_elasticity,
  model_dimensions
)

Arguments

trade_share

Array of initial trade flows, dimensions: origin x destination x sector.

trade_cost_change

Array of change in trade costs, dimensions: origin x destination x sector.

input_cost_change

Matrix of input cost changes, dimensions: sector x country.

price_change

Matrix of price index changes, dimensions: sector x country.

trade_elasticity

Positive Frechet trade elasticity theta, dimension: sector.

model_dimensions

List of model dimensions.

Value

Array of new trade shares, dimensions: origin x destination x sector.