Transcript Trade, comparative advantage, and competition

Figure 3.1 Labor productivity and GDP per capita, 2009
Labor productivity and GDP per capita; logarithmic scales, 2009
GDP per capita
100,000
Norway
Netherlands
Brazil
10,000
Peru
1,000
10
labor productivity
100
Source: calculations based on Conference Board Total Economy Database, 1950-2009; GDP per capita and labor
productivity per hour worked both in 2009 US$ (converted to 2009 price level using PPP); logarithmic scales.
Figure 3.2 Ratio of productivity in wheat (tonnes/ha) to productivity in
sugarcane (tonnes/ha)
Source: Costinot and Donaldson (2012), reprinted with permission; areas shaded white have either zero
productivity in wheat, or zero productivity in both wheat and sugarcane; areas shaded dark with the highest value
have zero productivity in sugarcane and strictly positive productivity in wheat.
Figure 3.3 Knowledge spillovers in developing countries, 1971-1990
Knowledge spillovers
ratio of total factor productivity
2.5
2.0
South Korea
1.5
1.0
0.5
Niger
0.0
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
education-weighted ratio of foreign knowledge stock
Source: calculations based on data from Coe, Helpman, and Hoffmaister (1997)
1.6
1.8
Figure 3.4 An isoquant
capital
A
B
C
Isoquant Y = 1
0
labor
Figure 3.5 Cost minimization
K
c1
c2
slope  
w
r 0
A0
c3
A1
isoquant
slope  
L
w
r1
Figure 3.6 Lerner diagram, a goods prices and b factor prices
pc / p s
K
panel a
panel b
steel1
steel0
p c1 / p s
1 / ps
cloth1
cloth0
pc 0 / p s
1 / pc 0
1 / pc1
w
slope  
r1
slope  
L
w
r 0
w/r
(w/r)0
(w/r)1
Figure 3.7 The impact of international trade
pc/ps
(pc/ps)2
Autarky2
(pc/ps)tr
(pc/ps)1
Trade
Autarky1
(w/r)1
(w/r)tr
(w/r)2
w/r