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Innovation, Diffusion, and Trade: Theory and Measurement

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  • Santacreu, Ana Maria

Abstract

Growth and imports are correlated across countries, but the mechanisms underlying this relationship are not well understood. I develop a multi-country model in which imports and growth are connected by technological innovations and their international diffusion through trade. Fitting the model to data on innovation, productivity, and trade in varieties, I find that most of the growth-imports correlation is explained by these two mechanisms. I also find that the trade channel has been particularly important in developing countries, accounting for about three-fourths of their growth. Finally, I run counterfactuals analysis.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 35311.

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Date of creation: 07 Dec 2011
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Handle: RePEc:pra:mprapa:35311

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Keywords: Trade; productivity; innovation; technology diffusion; growth;

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Cited by:
  1. Ana Santacreu, 2012. "The Trade Comovement Puzzle and the Margins of International Trade," 2012 Meeting Papers 34, Society for Economic Dynamics.

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