Equilibrium Technology Diffusion, Trade, and Growth

92 Pages Posted: 27 Jan 2015 Last revised: 23 Jul 2021

See all articles by Jesse Perla

Jesse Perla

University of British Columbia (UBC)

Christopher Tonetti

New York University (NYU)

Michael E. Waugh

New York University (NYU), Leonard N. Stern School of Business, Department of Economics

Date Written: January 2015

Abstract

We study how opening to trade affects economic growth in a model where heterogeneous firms can adopt new technologies already in use by other firms in their home country. We characterize the growth rate using a summary statistic of the profit distribution—the mean-min ratio. Opening to trade increases the profit spread through increased export opportunities and foreign competition, induces more rapid technology adoption, and generates faster growth. Quantitatively, these forces produce large welfare gains from trade by increasing an inefficiently low rate of technology adoption and economic growth.

Suggested Citation

Perla, Jesse and Tonetti, Christopher and Waugh, Michael E., Equilibrium Technology Diffusion, Trade, and Growth (January 2015). NBER Working Paper No. w20881, Available at SSRN: https://ssrn.com/abstract=2555401

Jesse Perla (Contact Author)

University of British Columbia (UBC) ( email )

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HOME PAGE: http://www.jesseperla.com

Christopher Tonetti

New York University (NYU) ( email )

Bobst Library, E-resource Acquisitions
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New York, NY 10003-711
United States

HOME PAGE: http://www.christophertonetti.com/

Michael E. Waugh

New York University (NYU), Leonard N. Stern School of Business, Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States

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