Idea Flows, Economic Growth, and Trade

Álvarez, Fernando; Buera, Francisco J.; Lucas, Robert E.

doi:10.3386/w19667

Cited by 120 publications

(107 citation statements)

References 37 publications

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“…Second, our findings are consistent with works that emphasise the importance of learning for policy adoption (see, among others, Buera et al, 2011) and for growth (e.g. Alvarez et al, 2013;Sampson, 2016). We contribute to this literature by showing that learning may involve institutions, and not only policies, and by presenting suggestive evidence that trade can be a mediating factor that favours cultural transmission.…”

supporting

confidence: 89%

Economic Integration and Democracy: An Empirical Investigation

Magistretti¹,

Tabellini²

2017

SSRN Journal

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We study whether economic integration fosters the process of democratization and the channels through which this might happen. Our analysis is based on a large panel dataset of countries between 1950 and 2014. We instrument actual trade with predicted trade constructed by estimating a time-varying gravity equation similar to Feyrer (2009). We find that economic integration has a positive effect on democracy, driven by trade with democratic partners and stronger for countries with lower initial levels of economic and institutional development. These results are consistent with a learning/cultural exchange process whereby economic integration promotes the spread of democracy from more to less democratic countries. We corroborate this interpretation by providing evidence against alternative mechanisms, such as income effects, human capital accumulation, and trade-induced changes in inequality.

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supporting

confidence: 89%

Economic Integration and Democracy: An Empirical Investigation

Magistretti¹,

Tabellini²

2017

SSRN Journal

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“…Most closely related to this paper is the work on trade, growth and selection by Baldwin and Robert-Nicoud (2008), Lucas (2011) andWaugh (2014). Baldwin and RobertNicoud (2008) show that incorporating firm heterogeneity into an expanding variety growth model leads to an ambiguous effect of trade on growth that depends on the extent of international knowledge spillovers.…”

Section: Introductionmentioning

confidence: 95%

“…Third, average firm size decreases as the economy grows. Alvarez, Buera and Lucas (2011) show that international knowledge spillovers increase growth in an Eaton and Kortum (2002) trade model, but assume that the rate of technology diffusion is independent of agents' optimization decisions and do not model firm level behavior. Perla, Tonetti and Waugh (2014) develop an open economy extension of in which growth is driven by technology diffusion between incumbent firms, but the mass of firms is fixed.…”

Section: Introductionmentioning

confidence: 99%

Dynamic Selection: An Idea Flows Theory of Entry, Trade, and Growth *

Sampson

2015

The Quarterly Journal of Economics

139

133

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This paper develops an idea flows theory of trade and growth with heterogeneous firms. New firms learn from incumbent firms, but the diffusion technology ensures entrants learn not only from frontier technologies, but from the entire technology distribution. By shifting the productivity distribution upwards, selection on productivity causes technology diffusion and this complementarity generates endogenous growth without scale effects. On the balanced growth path, the productivity distribution is a traveling wave with an increasing lower bound. Growth of the lower bound causes dynamic selection. Free entry mandates that trade liberalization increases the rates of technology diffusion and dynamic selection to offset the profits from new export opportunities. Consequently, trade integration raises long-run growth. The dynamic selection effect is a new source of gains from trade not found when firms are homogeneous. Calibrating the model implies that dynamic selection approximat ely triples the gains from trade relative to heterogeneous firm economies with static steady states.

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“…One possible avenue is explored by Alvarez et al [56], who consider a multi-country model in which knowledge is transmitted through the interaction with the sellers of goods to a country. In their theory, barriers to trade affect the composition of sellers to a country, and therefore they impact the diffusion of knowledge.…”

Section: (C) Diffusion and International Tradementioning

confidence: 99%

Partial differential equation models in macroeconomics

Achdou

Buera

Lasry

et al. 2014

Phil. Trans. R. Soc. A.

163

209

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The purpose of this article is to get mathematicians interested in studying a number of partial differential equations (PDEs) that naturally arise in macroeconomics. These PDEs come from models designed to study some of the most important questions in economics. At the same time, they are highly interesting for mathematicians because their structure is often quite difficult. We present a number of examples of such PDEs, discuss what is known about their properties, and list some open questions for future research.

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Idea Flows, Economic Growth, and Trade

Cited by 120 publications

References 37 publications

Economic Integration and Democracy: An Empirical Investigation

Economic Integration and Democracy: An Empirical Investigation

Dynamic Selection: An Idea Flows Theory of Entry, Trade, and Growth *

Partial differential equation models in macroeconomics

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