We document the divergence of per capita incomes across states in India between 1960 and 1996. We find that differences in the evolution of state-specific productivity can account for most of the observed increase in income disparities across Indian states during this period.

We study the importance of international trade in structural change. Our framework has both productivity and trade cost shocks, and allows for non-unitary income and substitution elasticities. We calibrate our model to investigate South Korea's structural change between 1971 and 2005. We find...

Motivated by increasing trade and fragmentation of production across countries since World War II, we build a dynamic two-country model featuring sequential, multistage production and capital accumulation. As trade costs decline over time, globalvalue-chain (GVC) trade expands across countries,...