We propose a sufficient statistics approach to measuring Ricardian comparative advantage in a quantitative trade model featuring cross-country differences in productivity, factor prices, market size, as well as monopolistic competition, endogenous markups, and firm heterogeneity.
- Speaker
- Date
- Monday 12 Feb 2024, 11:30 - 12:30
- Type
- Seminar
- Room
- 2-18
- Building
- Polak Building
The model’s micro-foundations do not necessarily imply that the relevant data for the proposed sufficient statistics must include micro information, but its micro-structure is needed to understand how only macro information can be used instead. Applying the approach to Chinese microdata and cross-country macrodata, we show that imperfect competition with endogenous markups and firm heterogeneity have far-reaching implications for correctly measuring Ricardian comparative advantage.
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