A Global View of Creative Destruction
In the wake of the U.S.-Canada Free Trade Agreement, both the U.S. and Canada experienced a sustained increase in job reallocation, including firms moving into exporting. The change involved big firms as much as small firms. To mimic these patterns,we formulate a model of innovation by both domestic and foreign firms. In the model, trade liberalization quickens the pace of creative destruction, thereby speeding the flow of technology across countries. The resulting dynamic gains from trade liberalization are an order of magnitude larger than the gains in a standard static model.
-
-
Copy CitationChang-Tai Hsieh, Peter J. Klenow, and Ishan B. Nath, "A Global View of Creative Destruction," NBER Working Paper 26461 (2019), https://doi.org/10.3386/w26461.Download Citation
-
Published Versions
Chang-Tai Hsieh & Peter J. Klenow & Ishan Nath, 2023. "A Global View of Creative Destruction," Journal of Political Economy Macroeconomics, vol 1(2), pages 243-275.
More from the NBER
In addition to working papers, the NBER disseminates affiliates’ latest findings through a range of free periodicals — the NBER Reporter, the NBER Digest, the Bulletin on Health, and the Bulletin on Entrepreneurship — as well as online conference reports, video lectures, and interviews.
