Working Paper: NBER ID: w13691
Authors: Arnaud Costinot; Ivana Komunjer
Abstract: Though one of the pillars of the theory of international trade, the extreme predictions of the Ricardian model have made it unsuitable for empirical purposes. A seminal contribution of Eaton and Kortum (2002) is to demonstrate that random productivity shocks are sufficient to make the Ricardian model empirically relevant. While successful at explaining trade volumes, their model remains silent with regards to one important question: What goods do countries trade? Our main contribution is to generalize their approach and provide an empirically meaningful answer to this question.
Keywords: No keywords provided
JEL Codes: F10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| productivity levels (O49) | export patterns (F10) |
| relative productivity rankings (O49) | relative export performance (F14) |
| labor productivity (J24) | exports (F10) |
| exports (F10) | labor productivity (J24) |