International Value-Added Linkages in Development Accounting

19  February 2018    3:00 pm

Alejandro Cuñat, University of Vienna and CESifo

In cooperation with:
Research Centre International Economics (FIW) 

Venue

wiiw, Rahlgasse 3, 1060 Vienna

Registration

We kindly ask you to register for the event. Participation is free of charge.

Description

The presentation is based on a paper co-authored with Robert Zymek (University of Edinburgh and CESifo).

We generalise the traditional development-accounting framework to an open-economy setting. In addition to factor endowments and productivity, relative factor costs emerge as a source of real-income variation across countries. These are determined by bilateral trade frictions (which underpin the patterns of “international value-added linkages”) and the global distribution of factor endowments and final expenditures. We use information on endowments, trade balances and value-added trade to back out the relative factor costs of 40 major economies in a theory-consistent manner. This reduces the variation in “residual” TFP required to explain the observed per-capita income differences by more than one half.

Paper and Powerpoint presentation, as far as available, are posted on this page after the seminar.

Keywords: world input-output, development accounting, transfer effect

JEL classification: E01, F15, F40, F62, F63


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