Discussion Paper Details

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Title: Technological Convergence and International Trade

Author(s): Dan Ben-David

Publication Date: March 1996

Keyword(s): Income Convergence, International Trade, Technology and TFP

Programme Area(s): International Macroeconomics and International Trade and Regional Economics

Abstract: This paper builds on earlier evidence showing that, while most countries exhibit little evidence of unconditional income convergence, countries that trade heavily with one another tend to exhibit a much higher incidence of convergence. Two alternative explanations for the trade-related convergence are explored here. The first alternative is that the trade-related income convergence is due to a convergence in capital-labour ratios. Little support is found for this explanation. The other alternative examined here is that of a trade-related convergence in technologies. This alternative is corroborated by a high incidence of convergence in total factor productivities among countries that trade heavily with one another ? an outcome that is not common between these same countries when they are grouped randomly rather than on the basis of trade.

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Bibliographic Reference

Ben-David, D. 1996. 'Technological Convergence and International Trade'. London, Centre for Economic Policy Research.