International Value-Added Linkages in Development Accounting

Arbeitspapier

We generalise the traditional development-accounting framework to an open-economy setting. In addition to factor endowments and productivity, relative factor costs emerge as a source of real-income variation across countries. These are shaped by bilateral trade determinants (which underpin the patterns of “international value-added linkages”) and the global distribution of factor endowments and final expenditures. We use information on endowments, trade balances and value-added trade to back out the relative factor costs of 40 major economies in a theory-consistent manner. This reduces the variation in “residual” productivity required to explain the observed per-capita income differences by more than one half.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 7196

Classification and Topics

• Classification: Wirtschaft ; Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts ; Economic Integration ; Macroeconomic Aspects of International Trade and Finance: General ; Economic Impacts of Globalization: Macroeconomic Impacts ; Economic Impacts of Globalization: Economic Development
• Subject: world input-output ; development accounting ; productivity

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Cuñat, Alejandro ; Zymek, Robert
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/185394
• Last update: 01.03.2025, 11:44 AM CET