Comparing advantages: US trade with the rest of the world, 1968~2008

Roger White, David Buehler

Research output: Contribution to journalArticle

Abstract

Calibrating a stylized version of the Dornbusch-Fischer-Samuelson model, this paper finds that relative to a cohort of 97 trading partners, the US capital stock, labor force, and nominal GDP per capita decreased, while the level of technology embodied in its output increased. These observed dynamics suggest a shift in comparative advantage that, coupled with increased production at the extensive and intensive margins, yields an expectation of labor market churning. Grouping trading partners by World Bank income classifications reveals that observed changes for low and lower middle income cohorts resulted in more pronounced shifts in comparative advantage. Examining employment and earnings in US manufacturing industries, a dynamic regression model reveals that increased import penetration has significant negative effects on production worker employment and wages, while increases in exports has significant positive effects on production worker employment. Variation in labor market outcomes is found across income classifications, as well as industries categorized by trade orientation.

Original languageEnglish (US)
Pages (from-to)429-466
Number of pages38
JournalJournal of Economic Integration
Volume30
Issue number3
DOIs
StatePublished - Sep 2 2015

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Income
Workers
Cohort
Comparative advantage
Labour market
Manufacturing industries
Capital stock
Grouping
World Bank
Wages
Labor force
Industry
GDP per capita
Extensive margin
Import penetration
Intensive margin
Labor market outcomes
Regression model

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)

Cite this

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Comparing advantages : US trade with the rest of the world, 1968~2008. / White, Roger; Buehler, David.

In: Journal of Economic Integration, Vol. 30, No. 3, 02.09.2015, p. 429-466.

Research output: Contribution to journalArticle

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