What Goods Do Countries Trade? New Ricardian Predictions

Arnaud Costinot and Ivana Komunjer

No 13691, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Though one of the pillars of the theory of international trade, the extreme predictions of the Ricardian model have made it unsuitable for empirical purposes. A seminal contribution of Eaton and Kortum (2002) is to demonstrate that random productivity shocks are sufficient to make the Ricardian model empirically relevant. While successful at explaining trade volumes, their model remains silent with regards to one important question: What goods do countries trade? Our main contribution is to generalize their approach and provide an empirically meaningful answer to this question.

JEL-codes: F10 (search for similar items in EconPapers)
Date: 2007-12
New Economics Papers: this item is included in nep-int
Note: ITI
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Citations: View citations in EconPapers (23)

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Working Paper: What Goods Do Countries Trade? New Ricardian Predictions (2006)
Working Paper: What Good Do Countries Trade? New Ricardian Predictions (2006)
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