Three essays in macroeconomics

This thesis is a collection of three essays on international trade and economic growth. Chapter 1 analyzes the dynamic gains from trade in a Hecksher-Ohlin economy with endogenous factor accumulation. In a framework where heterogeneous workers make educational decisions in the presence of complete markets, I first show how convergence of factor rewards induces divergence of factor abundance and levels of income. When heterogeneous workers invest in schooling, higher type agents earn a surplus from their investment. By affecting educational decisions, trade influences the international distribution of this surplus. The latter effect tends to benefit richer countries disproportionately, leading to divergence of welfare when markets are opened to trade. The shift of investments to initially rich countries also leads to a global increase of the average skill premium despite a decrease of the price of skill intensive goods. I next examine whether the factor content of trade indeed does affect domestic education decisions. To establish a causal relation, I instrument for the factors embodied in actual imports by the geographic component of trade. The constructed measures of geographical proximity to skilled and unskilled labor have significant effects on domestic educational decisions.

Department dc:contributor.department

Massachusetts Institute of Technology. Dept. of Economics.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2006

Author dc:creator

• Auer, Raphael Anton Maximilian Peter Gabriel

Advisor dc:contributor.advisor

• Xavier Gabaix and Daron Acemoglu.

• Economics.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/37416

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/37416