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Equilibrium Technology Diffusion, Trade, and Growth

Jesse Perla (), Christopher Tonetti () and Michael Waugh

American Economic Review, 2021, vol. 111, issue 1, 73-128

Abstract: We study how opening to trade affects economic growth in a model where heterogeneous firms can adopt new technologies already in use by other firms in their home country. We characterize the growth rate using a summary statistic of the profit distribution: the mean-min ratio. Opening to trade increases the profit spread through increased export opportunities and foreign competition, induces more rapid technology adoption, and generates faster growth. Quantitatively, these forces produce large welfare gains from trade by increasing an inefficiently low rate of technology adoption and economic growth.

JEL-codes: D21 D24 F14 F43 O33 (search for similar items in EconPapers)
Date: 2021
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Working Paper: Equilibrium Technology Diffusion, Trade, and Growth (2015) Downloads
Working Paper: Equilibrium Technology Diffusion, Trade, and Growth (2013)
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DOI: 10.1257/aer.20151645

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