Capital heterogeneity as a source of comparative advantage: Putty-clay technology in a ricardian model

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. due to capacity constraints, only productive capital goods are activated in the equilibrium. Through this selection, the distribution of capital goods determines the industrylevel productivity: industry-level productivity is higher in an industry with relatively larger variation in capital goods, and hence in a perfectly competitive two-country, two-good, two-factor equilibrium, the industry has Ricardian comparative advantage. Terms of use: Documents inAn extension of the model, including fixed trade cost, describes a sorting situation in which the most productive production units (which are generally newer vintage) export, the moderately productive units serve the domestic market, and the least productive units (older) do not operate.

Comparative advantage, capital destruction, and hurricanes

“…A second theoretical framework that could serve as a basis to motivate our empirical exercise is given in Ishise (2016). Ishise (2016) extends a putty-clay framework with vintage capital a la Gilchrist & Williams (2005) to a model with two industries and blends it together with a dynamic international trade model in the style of Baxter (1992).…”

“…Ishise (2016) extends a putty-clay framework with vintage capital a la Gilchrist & Williams (2005) to a model with two industries and blends it together with a dynamic international trade model in the style of Baxter (1992). In Ishise (2016), capital, which can be thought of as a machine, is characterized by the following attributes: (1) capital is vintage and, because of technological progress, newer machines are more productive than older ones; (2) capital is capacity constraint in the sense that the operational choice is either to allocate a maximum of one worker to a machine or to keep the machine idle; (3) investments are irreversible; and (4) there are idiosyncratic productivity differences across machines of the same vintage. Ishise (2016) describes a sorting situation in which the most productive machines produce goods that are exported, machines with moderate productivity level produce goods that are used for the domestic market and machines with productivity levels at the bottom of the productivity distribution do not operate.…”

Substitution Effect of Natural Gas and the Energy Consumption Structure Transition in China

“…Heterogeneous characteristics have been found in the capitals of diverse energy sources, due to their differences in productivity and capital intensity. Therefore, the effects of policy implementation for energy structure adjustment vary in different periods [43][44][45]. Furthermore, it is helpful to measure the dynamic substitution elasticity by analyzing the impact of the behavior difference of capacity capital on the energy market [39,46,47].…”

In the Eye of the Storm Firms and Capital Destruction in India

“…In this framework, if investors were offered the opportunity to re-invest, they would not necessarily replicate their production structure. The framework builds on the implications of Redding (1999), which introduces the notion of endogenous dynamic comparative advantage, and Ishise (2016). Ishise (2016) combines an extended multi-industry putty-clay frameworkà la Gilchrist & Williams (2005) with a dynamic international trade model in the style of Baxter (1992).…”