There are two principal theories of why countries trade: comparative advantage and increasing returns to scale. Yet there is no empirical work that assesses the relative importance of these two theories in accounting for production structure and trade. We use a framework that nests an increasing...

The paper shows that the relationship between GDP per capita and levels of specialization can be predicted differently depending on whether the intensive or the extensive margin is considered. It shows that at the extensive margin countries continuously diversify their exports and that...

The paper shows that the relationship between GDP per capita and levels of specialization can be predicted differently depending on whether the intensive or the extensive margin is considered. It shows that at the extensive margin countries continuously diversify their exports and that...

This paper re-examines the ability of sticky-price models to generate volatile and persistent real exchange rates. We use a DSGE framework with pricing to market to illustrate the link between real exchange rate dynamics and what the model assumes about physical capital. We show that adding...

Literature notes many factors as affecting capital flows, but the effects of these flows over the recipient economies and the overall effect over growth are highly debatable. This study claims that although capital flows may be required for the increase in output, other forces are causing this...

In the second half of the 1990s, labor productivity growth rose in the United States and declined in most parts of Europe. This paper documents changes in capital deepening and multi-factor productivity (MFP) growth in information and communication technology (ICT) and non-ICT sectors. We...

This paper contributes to the empirical literature by providing a quantitative measurement of the influence of regional trade integration on productivity. For this purpose we address the link between trade and productivity thanks to knowledge spillovers in a multi-country model. The...

Unlike in Asia, the manufacturing sector has not (yet) become a driver of structural change in Africa. One common explanation is that the natural resource-focus of many African economies leads to Dutch disease effects. To test this argument for the case of newly found oil in Ghana we develop a...

This paper explores the link between trade structure, trade specialization and per capita incomegrowth. It is argued that industrial upgrading in export specialization patterns has a positive long-rungrowth effect, while the effect of structural change in industrial import patterns is in...