Federal Reserve Bank of Dallas Globalization and Monetary Policy Institute Capital Goods Trade and Economic Development

Almost 80 percent of capital goods production in the world is concentrated in 10 countries. Poor countries import most of their capital goods. We argue that international trade in capital goods has quantitatively important effects on economic development through two channels: (i) capital formation and (ii) aggregate TFP. We embed a multi country, multi sector Ricardian model of trade into a neoclassical growth model. Barriers to trade result in a misallocation of factors both within and across countries. We calibrate the model to bilateral trade flows, prices, and income per worker. Our model matches several trade and development facts within a unified framework. It is consistent with the world distribution of capital goods production, crosscountry differences in investment rate and price of final goods, and crosscountry equalization of price of capital goods and marginal product of capital. The crosscountry income differences decline by more than 50 percent when distortions to trade are eliminated, with 80 percent of the change in each country's income attributable to change in capital. Autarky in capital goods results in an income loss of 17 percent for poor countries, with all of the loss stemming from decreased capital. The views in this paper are those of the authors and do not necessarily reflect the views of the Federal Reserve Bank of St. Louis, the Federal Reserve Bank of Dallas, or the Federal Reserve System.

世界上近80%的资本品生产集中在10个国家。贫穷国家大部分资本品依赖进口。我们认为，资本品国际贸易通过两个渠道对经济发展产生重大的量化影响：（i）资本形成和（ii）全要素生产率。我们将一个多国、多部门的李嘉图贸易模型嵌入新古典增长模型。贸易壁垒导致国家内部和国家之间的要素错配。我们根据双边贸易流量、价格和人均收入对模型进行校准。我们的模型在一个统一框架内符合若干贸易和发展事实。它与资本品生产的世界分布、各国投资率和最终产品价格的差异以及资本品价格和资本边际产品的跨国均等化相符。当消除贸易扭曲时，跨国收入差异下降超过50%，每个国家收入变化的80%可归因于资本的变化。资本品自给自足导致贫穷国家收入损失17%，所有损失都源于资本减少。本文观点仅代表作者，不一定反映圣路易斯联邦储备银行、达拉斯联邦储备银行或联邦储备系统的观点。