The Global Welfare Impact of China: Trade Integration and Technological Change
American Economic Journal: Macroeconomics
vol. 6,
no. 3, July 2014
(pp. 153-83)
Abstract
This paper evaluates the global welfare impact of China's trade integration and technological change in a multi-country quantitative Ricardian-Heckscher-Ohlin model. We simulate two alternative growth scenarios: a "balanced" one in which China's productivity grows at the same rate in each sector, and an "unbalanced" one in which China's comparative disadvantage sectors catch up disproportionately faster to the world productivity frontier. Contrary to a well-known conjecture (Samuelson 2004), the large majority of countries experience significantly larger welfare gains when China's productivity growth is biased toward its comparative disadvantage sectors. This finding is driven by the inherently multilateral nature of world trade.Citation
di Giovanni, Julian, Andrei A. Levchenko, and Jing Zhang. 2014. "The Global Welfare Impact of China: Trade Integration and Technological Change." American Economic Journal: Macroeconomics, 6 (3): 153-83. DOI: 10.1257/mac.6.3.153Additional Materials
JEL Classification
- F14 Empirical Studies of Trade
- F43 Economic Growth of Open Economies
- O19 International Linkages to Development; Role of International Organizations
- O33 Technological Change: Choices and Consequences; Diffusion Processes
- O47 Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- P24 Socialist Systems and Transitional Economies: National Income, Product, and Expenditure; Money; Inflation
- P33 Socialist Institutions and Their Transitions: International Trade, Finance, Investment, Relations, and Aid
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