Technology, geography, and trade

Jonathan Eaton, Samuel Kortum

Research output: Contribution to journalArticle

1222 Scopus citations

Abstract

We develop a Ricardian trade model that incorporates realistic geographic features into general equilibrium. It delivers simple structural equations for bilateral trade with parameters relating to absolute advantage, to comparative advantage (promoting trade), and to geographic barriers (resisting it). We estimate the parameters with data on bilateral trade in manufactures, prices, and geography from 19 OECD countries in 1990. We use the model to explore various issues such as the gains from trade, the role of trade in spreading the benefits of new technology, and the effects of tariff reduction.

Original languageEnglish (US)
Pages (from-to)1741-1779
Number of pages39
JournalEconometrica
Volume70
Issue number5
DOIs
StatePublished - Jan 1 2002

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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