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Equilibrium Technology Diffusion, Trade, and Growth

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

No 20881, NBER Working Papers from National Bureau of Economic Research, Inc

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: A1 E1 F00 F43 O4 (search for similar items in EconPapers)
Date: 2015-01
New Economics Papers: this item is included in nep-gro, nep-int and nep-opm
Note: EFG ITI PR
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Published as Jesse Perla & Christopher Tonetti & Michael E. Waugh, 2021. "Equilibrium Technology Diffusion, Trade, and Growth," American Economic Review, American Economic Association, vol. 111(1), pages 73-128, January.

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Journal Article: Equilibrium Technology Diffusion, Trade, and Growth (2021) Downloads
Working Paper: Equilibrium Technology Diffusion, Trade, and Growth (2013)
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