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American Economic Review: Vol. 90 No. 5 (December 2000)
AER Volume. 90, Issue 5 | 
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Diversity and Trade
Article Citation
Grossman, Gene M., and
Giovanni Maggi. 2000. "Diversity and Trade."
American Economic Review,
90(5): 1255-1275.
DOI: 10.1257/aer.90.5.1255
DOI: 10.1257/aer.90.5.1255
Abstract
We develop a competitive model of trade between countries with similar aggregate factor endowments. The trade pattern reflects differences in the distribution of talent across the labor forces of the two countries. The country with a relatively homogeneous population exports the good produced by a technology with complementarities between tasks. The country with a more diverse workforce exports the good for which individual success is more important. Imperfect observability of talent strengthens the forces of comparative advantage. Finally, we examine the effects of trade on income distribution and the composition of firms in each industry.
Article Full-Text Access
Full-text Article
Authors
Grossman, Gene M. (Princeton U)
Maggi, Giovanni (Princeton U)
Maggi, Giovanni (Princeton U)
JEL Classifications
F11: Neoclassical Models of Trade
