William Johnson (Dartmouth Post-doc) will present:
"Economic Growth and the Evolution of Comparative Advantage in an Occupation-Based Network of Industries"
at 12:15pm on Tuesday, September 25, 2018 in (051 Buchanan) Volanakis - TUCK
Lunch will be served at noon.

If you will be attending the Lunch Seminar please RSVP to Galen Muskat at TUCK so he can order the appropriate amount of food.
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ABSTRACT:

Recent evidence suggests significant changes over time in the pattern of comparative advantage across countries and industries. What drives such dynamics remains an open question. A mechanism suggested by theoretical literature, but not yet brought to bear on this evidence, is learning-by-doing. In this paper I develop a quantitative model of trade and growth with the goal of characterizing the relationship between learning-by-doing and the dynamics of comparative advantage. The model features an occupational dimension to learning, which endogenously generates a particular network structure of inter-industry learning diffusion, based on occupational similarity. The model predicts that countries with a comparative advantage in industries more central in this network will grow more in the aggregate. I use the model-implied dynamics of comparative advantage to quantitatively discipline the amount of occupational learning and the extent to which learning diffuses across industries. Compared to intra-industry learning, I find that cross-industry learning diffusion explains at least four times as much of the dynamics of comparative advantage, as well as forty percent of an industry's contribution to aggregate growth.







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