Revealed Comparative Advantage: What Is it Good For?

Scott French

No 2014-39B, Discussion Papers from School of Economics, The University of New South Wales

Abstract: This paper applies a widely-used class of quantitative trade models to evaluate the usefulness of measures of revealed comparative advantage (RCA) in academic and policy analyses. I find that, while commonly-used indexes are generally not consistent with theoretical notions of comparative advantage, certain indexes can be usefully employed for certain tasks. I explore several common uses of RCA indexes and show that different indexes are appropriate when attempting to (a) uncover countries' fundamental patterns of comparative advantage, (b) evaluate the differential effect of changes in trade barriers across producers of different products, or (c) identify countries who are relatively close competitors in a given market.

Keywords: Relative productivity; index; Ricardian; trade barriers; trade policy; trade elasticity (search for similar items in EconPapers)
JEL-codes: F10 F13 F14 F15 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2017-01
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (46)

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Related works:
Journal Article: Revealed comparative advantage: What is it good for? (2017)
Working Paper: Revealed Comparative Advantage: What Is it Good For? (2014)
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