Department of Economics
1602 Fishburne Drive
Rich Bldg., 3rd Floor
Atlanta, GA 30322-2240
Institutional Affiliation: Emory University
NBER Working Papers and Publications
|September 2018||Innovation, Knowledge Diffusion, and Globalization|
with Natalia Ramondo: w25071
We review a recent body of theoretical literature that links the creation and diffusion of knowledge and technology to openness. We analyze two channels through which the spread of new ideas occurs: international trade and the activity of multinational firms (multinational production). The unifying theme of our survey is methodological. We focus on quantitative general equilibrium models that treat productivities as Fréchet random variables—as in the model of trade in Eaton and Kortum (2002) (EK). We present models in the literature that extend the EK model of trade to innovation, diffusion, and multinational firms, and examine the implications for counterfactuals related to the gains from trade. We finalize with new directions for research.
|March 2018||Trade with Correlation|
with Natalia Ramondo: w24380
We develop a trade model in which productivity presents an arbitrary pattern of correlation. The model approximates the full class of factor demand systems consistent with Ricardian theory. In particular, our framework formalizes Ricardo’s insight that countries gain more from trade with partners that have relatively dissimilar technology. Incorporating this insight entails a simple correction to the sufficient-statistic approach used for macro counterfactuals, and enables a general aggregation result that links macro demand systems to micro estimates. In our quantitative application, we estimate a multi-sector trade model which captures the possibility that nearby countries may share technology, and, hence, have correlated productivity draws. Our estimates suggest that accounting for corr...
|November 2015||The Dynamics of Comparative Advantage|
with Gordon H. Hanson, Marc-Andreas Muendler: w21753
This paper characterizes the dynamic empirical properties of country export capabilities in order to inform modelling of the long-run behavior of comparative advantage. The starting point for our analysis is two strong empirical regularities in international trade that have previously been studied incompletely and in isolation to one another. The literature has noted a tendency for countries to concentrate exports in a few sectors. We show that this concentration arises from a heavy-tailed distribution of industry export capabilities that is approximately log normal and whose shape is stable across countries, sectors, and time. Likewise, previous research has detected a tendency for mean reversion in national industry productivities. We establish that mean reversion in export capability, r...