The evolution of comparative advantage: Measurement and welfare implications

Andrei Levchenko and Jing Zhang

Journal of Monetary Economics, 2016, vol. 78, issue C, 96-111

Abstract: Using novel estimates of sectoral total factor productivities for 72 countries across 5 decades we provide evidence of relative productivity convergence: productivity grew systematically faster in initially relatively less productive sectors. These changes have had a significant impact on trade volumes and patterns, and a non-negligible welfare impact. Had productivity in each country׳s manufacturing sector relative to the US remained the same as in the 1960s, trade volumes would be higher, cross-country export patterns more dissimilar, and intra-industry trade lower than in the data. Relative sectoral productivity convergence – holding average growth fixed – had a modest negative welfare impact.

Keywords: Technological change; Sectoral TFP; Ricardian models of trade; Welfare (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (102)

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Related works:
Working Paper: The Evolution of Comparative Advantage: Measurement and Welfare Implications (2011)
Working Paper: The Evolution of Comparative Advantage: Measurement and Welfare Implications (2011)
Working Paper: The Evolution of Comparative Advantage: Measurement and Welfare Implications (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:78:y:2016:i:c:p:96-111

DOI: 10.1016/j.jmoneco.2016.01.005

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