Trade Patterns Among Industrial Countries: Their Relationship to Technology Differences and Capital Mobility

February 1, 2004

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper compares two alternative measures of technology differences across industrial countries during 1970-92: one measures differences in labor productivity (the Ricardian measure), and the other differences in total factor productivity (the Hicksian measure). The distinction between the two measures is important to the extent that trade patterns are inconsistent with comparative advantage revealed by the Hicksian measure, but not necessarily with that by the Ricardian measure. The distinction becomes more important in the period with high capital mobility across countries.

Subject: Comparative advantage, Economic sectors, International trade, Labor, Labor costs, Manufacturing, Technology, Trade balance

Keywords: capital mobility, comparative advantage, equipment industry, Hicksian measure, industry abbreviation, Labor costs, labor productivity, Manufacturing, neoclassical trade model, production function, Ricardian measure, textile industries in Japan, total factor productivity, Trade balance, WP

Pages:
31
Volume:
2004
DOI:
https://doi.org/10.5089/9781451844078.001
Issue:
023
Series:
Working Paper No. 2004/023
Stock No:
WPIEA0232004
ISBN:
9781451844078
ISSN:
1018-5941

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