UZH-Logo

Maintenance Infos

The evolution of comparative advantage: measurement and implications


Levchenko, Andrei A; Zhang, Jing (2015). The evolution of comparative advantage: measurement and implications. UBS Center Working Paper Series 11, University of Zurich : UBS International Center of Economics in Society.

Abstract

We estimate productivities at the sector level for 72 countries and 5 decades, and examine how they evolve over time in both developed and developing countries. In both country groups, comparative advantage has become weaker: productivity grew systematically faster in sectors that were initially at greater comparative disadvantage. These changes have had a signicant impact on trade volumes and patterns, and a non-negligible welfare impact. In the counterfactual scenario in which each country's comparative advantage remained the same as in the 1960s, and technology in all sectors grew at the same country-specic average rate, trade volumes would be higher, cross-country export patterns more dissimilar, and intra-industry trade lower than in the data. In this counterfactual scenario, welfare is also 1.6% higher for the median country compared to the baseline. The welfare impact varies greatly across countries, ranging from −1.1% to +4.3% among OECD countries, and from −4.6% to +41.9% among non-OECD countries.

We estimate productivities at the sector level for 72 countries and 5 decades, and examine how they evolve over time in both developed and developing countries. In both country groups, comparative advantage has become weaker: productivity grew systematically faster in sectors that were initially at greater comparative disadvantage. These changes have had a signicant impact on trade volumes and patterns, and a non-negligible welfare impact. In the counterfactual scenario in which each country's comparative advantage remained the same as in the 1960s, and technology in all sectors grew at the same country-specic average rate, trade volumes would be higher, cross-country export patterns more dissimilar, and intra-industry trade lower than in the data. In this counterfactual scenario, welfare is also 1.6% higher for the median country compared to the baseline. The welfare impact varies greatly across countries, ranging from −1.1% to +4.3% among OECD countries, and from −4.6% to +41.9% among non-OECD countries.

Downloads

27 downloads since deposited on 22 Apr 2015
19 downloads since 12 months
Detailed statistics

Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
03 Faculty of Economics > UBS International Center of Economics in Society
Working Paper Series > UBS Center Working Paper Series
Dewey Decimal Classification:330 Economics
JEL Classification:F11, F43, O33, O47
Uncontrolled Keywords:Technological change, sectoral TFP, Ricardian models of trade, welfare
Language:English
Date:April 2015
Deposited On:22 Apr 2015 09:36
Last Modified:05 Apr 2016 19:13
Series Name:UBS Center Working Paper Series
Number of Pages:63
ISSN:2296-2778
Official URL:http://www.ubscenter.uzh.ch/assets/workingpapers/WP11_The_Evolution_of_Comparative_Advantage.pdf
Related URLs:http://www.ubscenter.uzh.ch/en/publications/workingpapers
Permanent URL: https://doi.org/10.5167/uzh-110474

Download

[img]
Preview
Filetype: PDF
Size: 1MB

TrendTerms

TrendTerms displays relevant terms of the abstract of this publication and related documents on a map. The terms and their relations were extracted from ZORA using word statistics. Their timelines are taken from ZORA as well. The bubble size of a term is proportional to the number of documents where the term occurs. Red, orange, yellow and green colors are used for terms that occur in the current document; red indicates high interlinkedness of a term with other terms, orange, yellow and green decreasing interlinkedness. Blue is used for terms that have a relation with the terms in this document, but occur in other documents.
You can navigate and zoom the map. Mouse-hovering a term displays its timeline, clicking it yields the associated documents.

Author Collaborations