Working Paper: CEPR ID: DP2287
Authors: Stephen Redding
Abstract: The theoretical literature on trade and growth suggests that comparative advantage is endogenous and evolves over time. However, most of the empirical analysis of international trade flows is essentially static in nature. This paper proposes an empirical model of the dynamics of international specialisation. Employing disaggregated data on twenty industries in seven OECD countries, we examine the evolution of patterns of international specialisation over time and evaluate the role of changes in factor endowments in explaining observed dynamics.
Keywords: distribution dynamics; factor endowments; international trade; neoclassical model
JEL Codes: C14; F11; F14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| factor endowments (D29) | international specialization (F29) |
| changes in factor endowments (F16) | mobility in patterns of international specialization (F20) |
| factor endowments (D29) | persistence of specialization patterns (C41) |
| technology and relative prices (O49) | variations in specialization (Z00) |