Sposi, Michael; Mutreja, Piyusha; Ravikumar, B. - Federal Reserve Bank of Dallas - 2014
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 …