NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Diversity and Trade

Gene M. Grossman, Giovanni Maggi

NBER Working Paper No. 6741
Issued in September 1998
NBER Program(s):   ITI

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 homogenous population exports the good produced by a technology with complementarities between tasks. The country with a more diverse work force exports the good for which individual success is more important. Imperfect observabilitiy of talent strengthens the forces of comparative advantage. Finally, we examine an aspect of education policy concerning the spread of human capital across the student population.

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Document Object Identifier (DOI): 10.3386/w6741

Published: Grossman, G. M. and G. Maggi. "Diversity And Trade," American Economic Review, 2000, v90(5,Dec), 1255-1275. citation courtesy of

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