Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/96637
Authors: 
Di Giovanni, Julian
Levchenko, Andrei A.
Zhang, Jing
Year of Publication: 
2013
Series/Report no.: 
Working Paper, Federal Reserve Bank of Chicago 2013-08
Abstract: 
This paper evaluates the global welfare impact of China's trade integration and technological change in a quantitative Ricardian-Heckscher-Ohlin model implemented on 75 countries. We simulate two alternative productivity growth scenarios: a balanced one in which China's productivity grows at the same rate in each sector, and an unbalanced one in which China's comparative disadvantage sectors catch up disproportionately faster to the world productivity frontier. Contrary to a well-known conjecture (Samuelson 2004), the large majority of countries in the sample, including the developed ones, experience an order of magnitude larger welfare gains when China's productivity growth is biased towards its comparative disadvantage sectors. We demonstrate both analytically and quantitatively that this finding is driven by the inherently multilateral nature of world trade. As a separate but related exercise we quantify the worldwide welfare gains from China's trade integration.
Subjects: 
China
productivity growth
international trade
JEL: 
F11
F43
O33
O47
Document Type: 
Working Paper

Files in This Item:
File
Size
886.52 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.