Trade, Value Added, and Productivity Linkages: A Quantitative Analysis

de Soyres, Fran莽ois; Gaillard, Alexandre

doi:10.1257/mac.20210192

Abstract

Traditional international real business cycle models produce a weak relationship between trade and cross-country real GDP correlations, contradicting empirical findings. We reassess this quantitative puzzle in a many-country model featuring (i) global value chains, (ii) monopolistic competition, (iii) fluctuations in the number of varieties, and (iv) real GDP measurement using double deflation. In this framework, fluctuations in imported inputs cause profit and efficiency variations, reflected in measured GDP and productivity fluctuations. Using actual variations in trade linkages, the model replicates 70% of the observed bilateral trade linkages to real GDP correlation slope and 60% of the productivity correlation slope.

蝌蚪网

蝌蚪网 Journal:
Macroeconomics