Data and Code for: Comparative Advantage in Innovation and Production
Principal Investigator(s): View help for Principal Investigator(s) Mariano Somale, Federal Reserve Board
Version: View help for Version V1
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| MATLAB | 04/10/2020 02:19:PM | ||
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application/pdf | 154.6 KB | 06/10/2020 04:12:PM |
Project Citation:
Somale, Mariano. Data and Code for: Comparative Advantage in Innovation and Production. Nashville, TN: American Economic Association [publisher], 2021. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2021-06-18. https://doi.org/10.3886/E118824V1
Project Description
Summary:
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This paper develops a dynamic model of innovation and international trade in which agents can direct their research efforts to specific goods in the economy. Trade affects the direction of innovation through its impact on the expected market size for an invention, leading to a two-way relationship between trade and technology absent in standard quantitative Ricardian models. Following a theory-consistent strategy to estimate the extent of endogenous adjustments in technology, I find that they can account for about a half of the observed variance in comparative advantage in production in a sample of 29 countries and 18 manufacturing industries. In addition, the model suggests that standard Ricardian models overestimate the reductions in real income from increases in trade costs, and underestimate the rise in real income due to trade liberalizations.
Scope of Project
Subject Terms:
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Innovation
JEL Classification:
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F10 Trade: General
F11 Neoclassical Models of Trade
O30 Innovation; Research and Development; Technological Change; Intellectual Property Rights: General
F10 Trade: General
F11 Neoclassical Models of Trade
O30 Innovation; Research and Development; Technological Change; Intellectual Property Rights: General
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