Diversity and Trade

Gene Grossman and Giovanni Maggi

No 6741, NBER Working Papers from National Bureau of Economic Research, Inc

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 labor forces of the two countries. The country with a relatively homogenous 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 observabilitiy 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.

JEL-codes: D51 F11 (search for similar items in EconPapers)
Date: 1998-09
New Economics Papers: this item is included in nep-tid
Note: ITI
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Citations: View citations in EconPapers (4)

Published as Grossman, G. M. and G. Maggi. "Diversity And Trade," American Economic Review, 2000, v90(5,Dec), 1255-1275.

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