Article ID Journal Published Year Pages File Type
963230 Journal of International Economics 2006 25 Pages PDF
Abstract
This article develops an approach to measuring the factor content of trade when intermediate inputs are traded, and techniques differ for reasons such as factor price differences. An empirical section documents the importance of intermediates and shows that they mitigate cross-country differences in the factor content of finished goods. The performance of recent models of factor service trade is also evaluated. Existing approaches impute the factor content of imported intermediates with domestic techniques and tend to overstate how well those models perform. The framework developed here can help reconcile general-equilibrium trade models with actual patterns of trade.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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