What Goods Do Countries Trade? A Quantitative Exploration of Ricardo's Ideas

Costinot, Arnaud; Donaldson, David; Komunjer, Ivana

doi:10.1093/restud/rdr033

Cited by 403 publications

(325 citation statements)

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“…Methodologically, our work builds on recent quantitative welfare assessments of trade integration in multi-sector Ricardian models (Shikher 2011, Caliendo and Parro 2010, Costinot, Donaldson and Komunjer 2012. A number of studies analyze the long-run aggregate impact of some of the emerging giant countries on welfare around the world (Coleman 2007, Hsieh and Ossa 2011, Levchenko and Zhang 2012, di Giovanni, Levchenko and Zhang 2013.…”

Section: Introductionmentioning

confidence: 99%

The Global Labor Market Impact of Emerging Giants: A Quantitative Assessment

Levchenko¹,

Zhang²

2013

IMF Econ Rev

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract This paper investigates both aggregate and distributional impacts of the trade integration of China, India, and Central and Eastern Europe in a quantitative multi-country multi-sector model, comparing outcomes with and without factor market frictions. Under perfect withincountry factor mobility, the gains to the rest of the world from trade integration of emerging giants are 0.37%, ranging from −0.37% for Honduras to 2.28% for Sri Lanka. Reallocation of factors across sectors contributes relatively little to the aggregate gains, but has large distributional effects. The aggregate gains to the rest of the world are only 0.065 percentage points lower when neither capital nor labor can move across sectors within a country. On the other hand, the distributional effects of the emerging giants' trade integration are an order of magnitude larger, with changes in real factor returns ranging from −5% to 5% across sectors in most countries. The workers and capital owners in emerging giants' comparative advantage sectors such as Textiles and Wearing Apparel experience greatest losses, while factor owners in Printing and Medical, Precision and Optical Instruments normally gain the most. Terms of use: Documents inJEL Classifications: F11, F15, F16

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Section: Introductionmentioning

confidence: 99%

The Global Labor Market Impact of Emerging Giants: A Quantitative Assessment

Levchenko¹,

Zhang²

2013

IMF Econ Rev

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“…This needs to be an advanced economy like Germany or the US. Given that the world economy will be our proxy for economy n, and Germany receives a much lower fraction of exports from Asian nations than the US, we prefer Germany to play the role of e. 6 Our data comprises exports and quality numbers from SITC, revision 1, at the two In order to obtain the parameter values needed to apply expression (26), we estimate the following regression for each 1-digit set of 2-digit-SITC sectors: 7…”

Section: Methodology and Datamentioning

confidence: 99%

“…In (27), country and sector fixed effects dummies -E i and E k , respectively -along with the country-specific time 6 By (17), expression (26) requires that economy n contains neither i nor e so that Φ nk is the same for both nations. Therefore, because n is the world economy, we need to choose for our sample countries that show relatively small bilateral trade flows with the reference nation.…”

Section: Methodology and Datamentioning

confidence: 99%

Quality Upgrading and the Stages of Diversification

Papageorgiou

Pérez-Sebastián

Spatafora³

2017

SSRN Journal

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This paper explores the contribution of product quality upgrading in the process of export diversification. To do this, the paper builds a multisector model following Eaton and Kortum (2002) in which product quality is incorporated as a key feature. The model is then calibrated to generate predictions about the degree of export diversification in a number of East Asian countries. It is shown that quality upgrading is a key factor to understand the changes in the degree of export diversification in the majority of countries in our sample.

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“…As the result of this competition, the producer with the lowest marginal cost of serving that market becomes the sole supplier of the good to that market and charges the minimum between the monopoly price and the maximum price that keeps competitors at bay. 11 In sum, the manufacturing sector is characterized by Bertrand competition in the market of each …nal good, and monopolistic competition among producers of …nal goods within an industry.…”

Section: R;! Tmentioning

confidence: 99%

Comparative Advantage in Innovation and Production

Somale

2017

Int. finance discuss. pap.

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This paper develops a multi-country, general equilibrium, semi endogenous growth model of innovation and trade in which specialization in innovation and production are jointly determined. The distinctive element of the model is the ability of the agents to direct their research e¤orts to speci…c goods, in a context of heterogeneous innovation capabilities across countries and contemporaneous decreasing returns to R&D. The model features a two-way relationship between trade and technology absent in standard quantitative Ricardian trade models. I calibrate the model using a sample of 29 countries and 18 manufacturing industries and quantify the importance of endogenous adjustments in technology. I …nd that endogenous adjustments in technology due to directed research can account for up to 52.8% of the observed variance in comparative advantage in production. In addition, the model suggests that standard Ricardian models overestimate the reductions in real income from increases in trade costs and underestimate the increment in real income due to trade liberalizations.

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What Goods Do Countries Trade? A Quantitative Exploration of Ricardo's Ideas

Abstract: Abstract. The Ricardian model predicts that countries should produce and export rela-

Cited by 403 publications

References 46 publications

The Global Labor Market Impact of Emerging Giants: A Quantitative Assessment

The Global Labor Market Impact of Emerging Giants: A Quantitative Assessment

Quality Upgrading and the Stages of Diversification

Comparative Advantage in Innovation and Production

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