Kortum wins 2018 onassis prize in international trade. National bureau of economic research, 1050 massachusetts ave. Marc lavoies book postkeynesian economics 2014 is a thick book of 650 pages and has a subtitle new foundations. International trade university of california, san diego. In 2004, kortum and eaton received the prestigious frisch medal for their paper technology, geography, and trade published in. They focus on the way in which determines the impact of trade costs on trade volumes. Pavcnik2002 40 5 the relevance of sunk costs 47 ii firms and the decision to invest abroad 52 6. They investigated if these trade imbalances are corrected, what would be the change in terms of trade. One immediate di culty we face in the estimation of preferences is that we have expenditure data, not separate price and quantity data.
The empirical evidence for the gravity equation in international trade is strong. Eaton and kortum 2002 have lead to fricardian revivalg. Eaton and kortum 2002 estimate from the gravity equation generated by the model together with bilateral import and price data for the oecd countries. Linking micro and macro, nber working papers 17864, national bureau of economic research, inc. Duranton, morrow, and turner 2011 apply anderson and wincoops gravity theory to estimate the effects of interstate highways on the level and composition of trade for u.
Eaton and kortum 2002 have proposed a new theory of international trade, an economical and versatile parameterization of the models. Building on eaton and kortums 2002 model of ricardian trade, alvarez and lucas 2005 calculate that a small country representing 1% of the worlds gdp experiences a gain of 41% as it goes from autarky to frictionless trade with the rest of the world. International trade policy has been highly controversial since the 18th century. This work appeared as eaton and kortum henceforth ek, 1999. Browse author series lists, sequels, pseudonyms, synopses, book covers, ratings and awards. First, we add dynamics to the family of new quantitative static trade models, such as eaton and kortum 2002 and anderson and van wincoop 2003 as summarized in costinot and rodriguezclare.
The article is located in the other sources folder on canvas. We establish existence and uniqueness of an equilibrium with balanced trade where each country imposes an import tariff. The gains from hyperglobalization wonkish the new york. This forthcoming journal of economic perspectives article by jonathan eaton and sam kortum on the ricardian model of trade is fantastic. There are many ways you could answer these questions. Sources of comparative advantage notes, slides trade, c. Technology, geography, and trade jonathan eaton samuel.
Our framework builds on recent advances in growth theory and trade theory. Books by jan eaton author of 200 crochet blocks for blankets. The eaton and kortum model is ricardian one which includes intermediate goods explicitly. We are grateful to cristina arellano, jonathan eaton, timothy kehoe and samuel kortum. Samuel kortum cowles foundation for research in economics. I also generalize this formula in armington setup with tariffs and highlight the importance of revenue generating tariffs. They show how the share of spending on domestic producers provides a simple. Foster, imported equipment, human capital and economic growth in developing countries ncer working paper no. Technology and the global economy by eaton, jonathan. Innovative activity is highly concentrated in a handful of advanced countries. It delivers simple structural equations for bilateral trade with parameters relating to absolute advantage, to comparative advantage promoting trade, and to geographic barriers resisting it.
National bureau of economic research, 2005 ocolc646902460. Patenting and productivity in the oecd, journal of international economics. This is a analysis of eatonkortum model in two countries version based on the paper written by fernando alvarez and robert e. Eaton jonathan and samuel kortum 2002 technology geography and trade from ec 1v at business school barcelona. While much of this book is theoretical, the structure of the theory is guided by a. Eaton is one of 228 newly elected members, and one of two penn staters, announced on april 12.
A vintage model scandinavian journal of economics 2005 vol. Eaton, jensen, and kortum 2003 27 4 firms and the decision to export. For each lecture, there are up to three types of readings. The impact of trade on intraindustry reallocations and aggregate industry productivity. In the model i construct here, countries also gain from di. Jan eatons most popular book is 200 crochet blocks for blankets, throws, and afghans. Addis, and combines a flashbackbased narrative structure with the gruesome style of 80s horror classics, creating a unique new voice critics are calling fresh, original, and truly terrifying. Youll find a wealth of useful resources, all designed to help you develop the best solution for your customers. Robert e lucas, jr national bureau of economic research. Before coming to yale in 2012, he served on the faculty at boston university, the university of minnesota, and the university of chicago. Jonathan eaton, penn state distinguished professor of economics, has been elected to the american academy of arts and sciences.
We study a variation of the eaton kortum model, a competitive, constantreturnstoscale multicountry ricardian model of trade. Eaton jonathan and samuel kortum 2002 technology geography. It is full of arguments on methodologies and policy orientations. Imported equipment, human capital and economic growth in. General equilibrium analysis of the eaton kortum model of international trade. We then realized that our framework delivered a static model that was readily amenable to the quantitative analysis of bilateral trade. We are also grateful to steve redding and peter schott for sharing their teaching material and to federico esposito, monica morlacco. Moreover, eaton and kortum 2002 derive a simple formula which shows the gains from trade and this formula is generalized by arkolakis, costinot, and rodriguezclare 2012 in the case of iceberg costs. Diversified industrial manufacturer eaton corporation today announced the launch of an ecommerce literature store that makes it easier and more secure than ever to purchase hydraulicsrelated training products that are used as teaching aids in industryleading training schools facilitated by eatons hydraulics training services department. Trade and the global recession american economic association. This comprehensive guide includes all the information that resellers need to help them understand and sell the industryleading power protection solutions from eaton. We establish existence and uniqueness of an equilibrium with balanced. Jonathan eaton elected to american academy of arts and sciences. Asymmetric trade costs and international income differences.
Mar 09, 2012 this forthcoming journal of economic perspectives article by jonathan eaton and sam kortum on the ricardian model of trade is fantastic. Eaton, jonathan, and samuel kortum 2012 putting ricardo to work, journal of economic. International trade theory is a subfield of economics which analyzes the patterns of international trade, its origins, and its welfare implications. The ek model is a versatile and tractable probabilistic. Trade in capital goods jonathan eaton, samuel kortum. This code i estimates the structural parameters for the ek2002 modelfrom a gravity regression ii simulates micro level prices and shares from the ek 2002 model and iii performs the feenstra 1994 i closely follow the presentation in his 2010 prodcut variety. Kortum, technology, geography, and trade originally published as technology and bilateral trade, nber working paper no. Use specific references in the text while answering the question. Bernard, eaton, jenson and kortum 2003 aer, plants and productivity in. Analysis of the eatonkortum modell of international trade. Pavcnik2002 40 5 the relevance of sunk costs 47 ii firms and the decision to invest abroad 52 6 horizontal fdi. A squared bits and spurs, kelley blue book, hope american lutheran church, gartnerdenowh angus ranch, savage warriors girls basketball, tyras. These same countries are also the major exporters of capital goods to the rest of the world. Samuel kortum, professor of economics, yale university.
It delivers simple structural equations for bilateral trade with parameters relating to absolute advantage. Is there any arguments, discussion or analysis why eaton and kortum model. Eaton and kortum 2002 derive a similar gravity equation in a modern version of trade driven by ricardian comparative advantages. Donaldson 2010 applies eaton and kortums framework to measure the benefits of railways in nineteenthcentury india. We combine a multicountry, continuumgood ricardian model of eaton and kortum 2002 with a multicountry ak model of acemoglu and ventura 2002 to examine how trade liberalization affects countries growth rates and extensive margins of trade over time. Dekle, eaton, and kortum 2008 describe a procedure. Both the role of distance and economic size are remarkably stable over time, across di. The eaton and kortum textbook draft and readings are available through the class web page see above. Kortum 1997 and eaton and kortum 1999 show how a process of innovation and diffusion can give rise to this distribution, with i.
This is a great advancement because ricardian models or other trade models including heckscherohlin. Search for more papers by this author samuel kortum. Focusing on the threecountry case, we obtain three main results. It translates the bodys own vocabulary of health data, which appears in a visible lexicon of symbols that are known as indicators. To isolate this aspect of the gravity equation, eaton and kortum focus on normalized trade. Technology, geography, and trade eaton 2002 econometrica. The natural model to use, at least for me, is eaton kortum pdf, which is a very ingenious approach to thinking about multilateral trade flows. May 07, 2018 dekle, eaton, and kortum aerpp 2007, p. Grossman and esteban rossihansberg outsourcing model. Lucas general equilibrium analysis of the eaton kortum model of international trade.
View citations in econpapers 102 track citations by rss feed. Facebook gives people the power to share and makes. Ricardian model in practice this question refers t. Jan eaton has 87 books on goodreads with 3909 ratings. We develop a ricardian trade model that incorporates realistic geographic features into general equilibrium.
To evaluate the repercussions of such an action, this paper uses eaton and kortum s 2002 multisector, multicountry general equilibrium model with intersectional linkages to forecast how exports, imports, output, and real wages would change if trumps threat of 45 percent tariffs is carried out. We study a variation of the eatonkortum model, a competitive, constantreturns toscale multicountry ricardian model of trade. Unbalanced trade, nber working papers 35, national bureau of economic research, inc. Trade and the global recession by jonathan eaton, samuel kortum, brent neiman and john romalis. Presumably, dekle, eaton, and kortum independently derived their approach without realizing a connection to techniques used previously in the computable general equilibrium cge.
In eaton and kortums 2002 model of ricardian trade with no di. General equilibrium analysis of the eatonkortum model of. Kortum said his work with eaton has been its own reward, but added that receiving the onassis prize was deeply gratifying as recognition that others value our contribution. Ecological risk assessment of shan xin mining area based on remote sensing and geography information system technology. Marge eaton heegaard has 22 books on goodreads with 558 ratings. This approach allows us to calibrate the model from existing data on production and trade shares. Samuel kortum is fellow of the econometric society, member of the american academy of arts and sciences, and research associate at the nber. Eaton, and kortum 2007 for a recent application, where they think of trade imbalances as transfers. It walks the reader from ricardo 1818 to mill 1844 to dornbusch, fischer, and samuelson 1977 to eaton and kortum 2002 to. The kortum technique is a visual assessment process that decodes the metabolic bonds that relate to biology and wellbeing. We develop a dynamic multicountry general equilibrium model to investigate forces acting on the globa.
International trade theory and economics itself have developed as means to evaluate the effects of trade policies. Trade in goods and trade in services world trade evolution taylor. Rather than estimating such a model in terms of levels, we specify the model in terms of changes from the current equilibrium. Donaldson 2010 applies eaton and kortum s framework to measure the benefits of railways in nineteenthcentury india. Unilateral trade liberalization and welfare analysis. Chaokui li, jianhui chen, mengguang liao, guo chen, qinlan zhou. We study a variation of the eatonkortum model, a competitive, constantreturnstoscale multicountry ricardian model of trade. Books by marge eaton heegaard author of when someone very. It walks the reader from ricardo 1818 to mill 1844 to dornbusch, fischer, and samuelson 1977 to eaton and kortum 2002 to the modern frontier. Since this simple analyzing of two countries version bases on the paper to alvarez and lucas, a larger means a larger variance in individual productivity. Applies feenstras 1994 estimation method to simulated data from eaton and kortum 2002 model. Bridger auto parts, analytical grammargrammar planet, thomas mac, eaton charolais ranch. The heckscherohlin ho model of international trade is a general equilibrium model that predicts that patterns of trade and production are based on the relative factor endowments of trading partners. We take this theoretical framework to a number of sources of data.
General equilibrium analysis of the eatonkortum model of international trade. Chaney 2008 extends the melitz 2003 model to derive a similar gravity equation in a model. Sam kortum and i are engaged in a research project that attempts to shed light on these issues. Eaton and kortum ecta, 2002 has lead to ricardian revival. This bibliography was generated on cite this for me on monday, march 9, 2015. Since the actual technique that would ever be used in any country represents the best discovered to date for producing each good, it makes sense to. Join facebook to connect with sharilyn kortum and others you may know. The basic model is ricardian wine and cloth and labor productivity and all that except that there are many goods and many countries, transportation costs, and countries are assumed to gain.
1163 367 1068 793 137 598 171 591 1096 41 610 1102 948 63 604 641 745 188 62 771 1164 1253 1186 1398 124 229 297 1147 1310 779 854 1448 57