Equilibrium Technology Diffusion, Trade, and Growth
Jesse Perla (),
Christopher Tonetti () and
No 20881, NBER Working Papers from National Bureau of Economic Research, Inc
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)
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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)
Working Paper: Equilibrium Technology Diffusion, Trade, and Growth (2013)
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