Working Paper: NBER ID: w3140
Authors: Magnus Blomström; Robert E. Lipsey; Lennart Ohlsson
Abstract: A long tradition in international economics explains comparative advantage by differences between countries in their stage of development, or their endowments of land, labor, and capital, and suggests that universal development will reduce the importance of trade. Sweden and the United States possess similar factor endowments and have converged in overall productivity, but their bilateral trade has grown. The example of these two countries suggests that mutual technological progress may promote trade, with the new basis for specialization being the different technology levels or R&D intensities of the goods being traded, rather than the initial endowments.
Keywords: international trade; R&D; technological progress
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Technological progress (O49) | Increased trade (F19) |
| R&D intensities (O32) | Increased trade (F19) |
| Technological advancements (O33) | Increased trade (F19) |
| Technological levels (O30) | Increased trade (F19) |
| Technological capacities (O30) | Increased trade (F19) |