Economics at your fingertips  

Composition of Capital and Gains from Trade in Equipment

Piyusha Mutreja ()

MPRA Paper from University Library of Munich, Germany

Abstract: Composition of capital varies systematically with incomes: rich countries have higher equipment capital shares than poor countries. Also, equipment production is highly concentrated and most countries import equipment. I investigate the quantitative importance of equipment trade for capital composition and how it affects incomes through capital composition. In a multi-country trade model, I show that equipment trade accounts for one-quarter of the cross-country variation in equipment capital share. The decline in equipment trade barriers during 1985-2005 resulted in income gains for all countries. Digging into these income gains reveals that capital composition is an important transmission mechanism: changes in capital composition alone account for 45 percent of the gains, on average.

Keywords: Equipment capital; Structures capital; Capital composition; Trade; Income; Capital goods; Equipment goods (search for similar items in EconPapers)
JEL-codes: E22 F14 F43 O16 O47 (search for similar items in EconPapers)
Date: 2016-06
New Economics Papers: this item is included in nep-int and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link) original version (application/pdf) revised version (application/pdf) revised version (application/pdf) revised version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

Page updated 2021-09-15
Handle: RePEc:pra:mprapa:74908