What Do Rich Countries Trade with Each Other? R&D and the Composition of U.S. And Swedish Trade

35 Pages Posted: 18 Apr 2007 Last revised: 9 Aug 2010

See all articles by Magnus Blomstrom

Magnus Blomstrom

Stockholm School of Economics - Department of Economics; National Bureau of Economic Research (NBER), at New York; Centre for Economic Policy Research (CEPR)

Robert E. Lipsey

National Bureau of Economic Research (NBER) at New York (Deceased)

Lennart Ohlsson

affiliation not provided to SSRN

Date Written: October 1989

Abstract

A long tradition in international economics explains comparative advantage by differences between countries in their stage of development, or their endowments of land, labor, and capital, and suggests that universal development will reduce the importance of trade. Sweden and the United States possess similar factor endowments and have converged in overall productivity, but their bilateral trade has grown. The example of these two countries suggests that mutual technological progress may promote trade, with the new basis for specialization being the different technology levels or R&D intensities of the goods being traded, rather than the initial endowments.

Suggested Citation

Blomstrom, Magnus and Lipsey, Robert E. and Ohlsson, Lennart, What Do Rich Countries Trade with Each Other? R&D and the Composition of U.S. And Swedish Trade (October 1989). NBER Working Paper No. w3140. Available at SSRN: https://ssrn.com/abstract=980444

Magnus Blomstrom (Contact Author)

Stockholm School of Economics - Department of Economics ( email )

P.O. Box 6501
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S-113 83 Stockholm
Sweden
+46 8 736 9265 (Phone)
+46 8 342 818 (Fax)

National Bureau of Economic Research (NBER), at New York

365 Fifth Avenue, 5th Floor
New York, NY 10016-4309
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Robert E. Lipsey

National Bureau of Economic Research (NBER) at New York (Deceased)

Lennart Ohlsson

affiliation not provided to SSRN

No Address Available

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