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On the dynamics of trade patterns

In this paper we analyse the dynamics of trade patterns in the six largest industrialised countries and in eight fast growing Asian economies. For each of these countries we study the shape of the sectoral distribution of an index of trade specialisation and its evolution over time. Our analysis shows a marked difference between the advanced and the emerging countries as far as the degree of persistence is concerned: the former are in fact characterised by a highly persistent trade pattern, while the latter's specialisation is highly mobile. However, the two groups of countries are more similar as far as the evolution of the degree of specialisation is concerned: although emerging countries are still more specialised than the industrialised countries, both groups show a tendency toward a reduced polarisation and a more symmetric distribution of the specialisation index. This evidence is in line with the traditional trade theory, in which changing comparative advantage is the determinant of a changing trade pattern. On the contrary, this evidence does not support the idea that self-reinforcing mechanisms are prominent in international trade specialisation.

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Paper provided by Cattaneo University (LIUC) in its series LIUC Papers in Economics with number 61.

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Length: 45 pages
Date of creation: Feb 1999
Date of revision:
Handle: RePEc:liu:liucec:61
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