 From groundnuts to globalization: A structural estimate of trade and growthChristian Broda, Joshua Greenfield and David Weinstein Research in Economics, 2017, vol. 71, issue 4, 759-783 Abstract: Starting with Romer (1987) and Rivera-Batiz-Romer (1991) economists have been able to model how trade enhances growth through the creation and import of new varieties. In this framework, international trade increases economic output through two channels. First, trade raises productivity levels because producers gain access to new imported varieties. Second, increases in the number of varieties drives down the cost of innovation and results in ever more variety creation. Using highly disaggregate trade data, e.g. Gabon’ s imports of Gambian groundnuts, we structurally estimate the impact that new imports have had in approximately 4000 markets per country. We then move from groundnuts to globalization by building an exact TFP index that aggregates these micro gains to obtain an estimate of trade on productivity growth for each country. We find that in the typical country in the world, new imported varieties account for 10–25% of its productivity growth. However, when we structurally estimate the long-run impacts of these productivity growth effects, we find that import variety growth between 1994 and 2003 raised world permanent income by 17% . Date: 2017 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:71:y:2017:i:4:p:759-783 DOI: 10.1016/j.rie.2017.10.001 Access Statistics for this article Research in Economics is currently edited by Federico Etro More articles in Research in Economics from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.