TY  - JOUR
AU  - Anderson,James E.
TI  - Gravity, Productivity and the Pattern of Production and Trade
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14642
PY  - 2009
Y2  - January 2009
UR  - http://www.nber.org/papers/w14642
L1  - http://www.nber.org/papers/w14642.pdf
N1  - Author contact info:
James E. Anderson
Department of Economics
Boston College
Chestnut Hill, MA 02467
Tel: 617/552-3691
Fax: 617/552-2308
E-Mail: james.anderson.1@bc.edu
AB  - The effects of geography and productivity on the global pattern of production are captured here in a specific factors gravity model. Simple enough for sharp results, the model is yet rich enough to contain the high dimensional productivity frictions in production and distribution of a many country world. The starting point is the international incidence of productivity frictions inferred from gravity. Sellers’ and buyers’ incidence both reduce real income. Sellers’ incidence shocks reduce sectoral skill premia. Bigger sellers’ incidence by country (sector) reduces equilibrium shares of world (national) GDP. In contrast to the generalized Ricardian gravity model of Eaton and Kortum (2002), relative factor endowments play a role and import-competing production and wage premia in exporting are featured.
ER  -