Using data from the US commodity flow surveys, we show that the historical UnionConfederacy border lowers contemporaneous trade between US states by about 16 percent relative to trade flows within the former alliances. Amongst one million placebos, there is no other constellation of state grouping that would yield a larger border effect. The finding is robust over different econometric models, ...

Perdangangan internasional sangat mempengaruhi pertumbuhan ekonomi suatu negara. Salah satu indikator adalah dengan Produk Domestik Bruto (PDB). PDB merupakan kesejahteraan perekonomian di negara dan dapat menjadi rujukan untuk mengukur masyarakat yang diukur tingkat pendapatan (income). Maka semakin meningkat ekspor negara, akan pula. Metode Penelitian digunakan dalam penelitian ini menggunaka...

We show a range of complexity results for the Ricardo and Heckscher-Ohlin models of international trade (as Arrow-Debreu production markets). For both models, we show three types of results: 1. When utility functions are Leontief and production functions are linear, it is NP-hard to decide if a market has an equilibrium. 2. When utility functions and production functions are linear, equilibria ...

Traditional neoclassical models of comparative advantage suggest that, all else equal, a country with idiosyncratically strong demand for a good will be an importer of that good. However, there is a contrary tradition that emphasizes the advantages of a large home market as a foundation for exports of a good. One recent formalization of this home market approach falls within what is termed the ...

Why is investment in human and physical capital in Latin America lower than in the faster growing economies of East Asia? Is this phenomenon and Latin America’s generally higher income inequality an important consequence of the input requirements and price variability of the regions’ products. To help answer these questions, this paper explores a Heckscher-Ohlin linear program incorporating rea...

Abstract By simulating a multi-country general equilibrium international trade model, we investigate how the Economic Complexity Index (ECI) and Fitness (FI) are related directly to economic fundamentals with clear basis in theory. The model is based on Eaton Kortum (2002) combines factor endowment (Heckscher–Ohlin) technological (Ricardian) reasons for specialization, which further determines ...

Abstract Two‐ or more‐factor general equilibrium models commonly assume no factor intensity reversals (FIRs): a good that is relatively capital intensive compared with other goods within country/region also another country/region. This assumption so important its breakdown results in the collapse of several well‐known theorems, such as Heckscher–Ohlin theorem and Stolper–Samuelson theorem. Seei...

In spite of Latin America’s dismal economic performance between the 1950s and 1980s, the region experienced strong capital deepening. Furthermore, productivity (measured as TFP) grew at low rates in comparison with the U.S. In this paper, we suggest that all these facts can be explained as a consequence of the restrictive trade regime adopted at that time. Our analytical framework is based on a...