What do rich countries trade with each other? R&D and the composition of U.S. and Swedish trade
Keywords:Trade, Comparative advantage, R&D, Specialisation
One tradition in international economics explains international trade as a phenomenon caused by differing national comparative advantages arising from different states of development. This approach leads to the conclusion that under a catching-up hypothesis the amount of trade might be expected to diminish over time. The authors analyse trade between Sweden and the United States, emphasising the R&D component of trade. They conclude that specialisation has occurred in the R&D intensity of goods being traded and that this has increased the scope for trade.
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