Working Paper: NBER ID: w16778
Authors: Changtai Hsieh; Ralph Ossa
Abstract: How does a country's productivity growth a¤ect worldwide real incomes through international trade? In this paper, we take this classic question to the data by measuring the spillover e¤ects of China's productivity growth. Our framework features traditional terms-of-trade e¤ects and new trade home market e¤ects as suggested by the theoretical literature and works from a reference point which perfectly matches industry-level trade. Focusing on the years 1995 to 2007, we find that the spillover e¤ects of China's productivity growth are small causing the real incomes of China's trading partners to increase by only 0.1 percent on average.
Keywords: No keywords provided
JEL Codes: F1; F4; O4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| China's productivity growth (O49) | real incomes of trading partners (F10) |
| China's productivity growth in export-oriented industries (O49) | real incomes of trading partners (F10) |
| China's productivity growth in import-competing industries (O49) | real incomes of trading partners (F10) |
| terms-of-trade effects (F16) | real incomes of trading partners (F10) |
| home market effects (F61) | real incomes of trading partners (F10) |
| China's productivity growth (O49) | small spillover effects (F69) |