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| Type | Working Paper |
| Scope | Discipline-based scholarship |
| Title | The evolution of comparative advantage: measurement and implications |
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| Institution | University of Zurich : UBS International Center of Economics in Society |
| Series Name | UBS Center Working Paper Series |
| Number | 11 |
| ISSN | 2296-2778 |
| Number of Pages | 63 |
| Date | 2015 |
| Abstract Text | 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. |
| Official URL | http://www.ubscenter.uzh.ch/assets/workingpapers/WP11_The_Evolution_of_Comparative_Advantage.pdf |
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| Keywords | Technological change, sectoral TFP, Ricardian models of trade,, , welfare |