Diversity and Trade

Gene Grossman and Giovanni Maggi

No 2005, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We develop a competitive model of trade between countries with similar aggregate factor endowments. The trade pattern reflects differences in the distribution of talent across the labour forces of the two countries. The country with a relatively homogeneous population exports the good produced by a technology with complementarities between tasks. The country with a more diverse work force exports the good for which individual success is more important. Imperfect observability of talent strengthens the forces of comparative advantage. Finally, we examine an aspect of education policy concerning the spread of human capital across the student population.

Keywords: Complementarities; education policy; Human Capital; trade pattern (search for similar items in EconPapers)
JEL-codes: D51 F11 (search for similar items in EconPapers)
Date: 1998-10
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Diversity and Trade (2000)
Working Paper: Diversity and Trade (1998)
Working Paper: Diversity and Trade (1998)
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