Working Papers
Lake Peekskill, New York
The Evolution of Comparative Advantage (with Fernando Vega-Redondo)
We study the evolution of comparative advantage in a model with two countries and n ≥ 2 goods. We show that the stochastically stable set consists of the pattern of production that follows the chain of comparative advantage in a sufficiently large world economy. Also, the chain of comparative advantage has an elegant structure that allows for step-by-step evolution. So convergence towards the equilibrium where each good is produced in the ”right” country is fairly rapid.
JEL B52 (evolutionary economics), D50 (general equilibrium), F10 (international trade)
Fisher-VegaRedondo15.pdf
Testing the Heckscher-Ohlin-Vanek Paradigm in a World with Cheap Foreign Labor (with Kathryn Marshall)
Measuring factor services, not physical quantities, we examine the technologies and endowments of thirty-nine countries in 2005. Each country has five factors of production. We conduct three tests of the Heckscher-Ohlin-Vanek paradigm: (1) the conventional one; (2) a benchmark where every country has America's technology; and (3) another that converts all endowments into international efficiency units. The first predicts the direction of trade better than any former study. The second shows no statistically significant evidence of missing trade. The third performs just as well, and it accounts for international differences in both factor prices and unit input requirements.
Heckscher-Ohlin-Vanek Theory, factor services, international productivity comparisons
Testing the HOV _World Economics.pdf