We consider the interaction of trade and technology diffusion in a two-region model of innovation and imitation. We find that globalization, either in the form of lower trade barriers or in faster diffusion of technology between innovator and imitator spurs innovation, benefiting both regions.

We model the invention of new technologies and their diffusion across countries. In our model all countries grow at the same steady-state rate, with each country's productivity ranking determined by how rapidly it adopts ideas. Research effort is determined by how much ideas earn at home and...

We describe a methodology to infer the extent of international technology diffusion and to decompose the sources of growth by nation. We compare the results from alternative implementation: of this methodology. A major finding is that the extent of international diffusion is substantial, with...

We incorporate trade imbalances into a quantitative model of bilateral trade in manufactures, dividing the world into forty "countries." We calculate the pattern of bilateral trade and relative factor costs in a counterfactual world with all current accounts balancing. Our results indicate that...