Spatial Correlation, Trade, and Inequality: Evidence from the Global Climate / Jonathan I. Dingel, Kyle C. Meng, Solomon M. Hsiang.

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Dingel, Jonathan I

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w25447.Publication details: Cambridge, Mass. National Bureau of Economic Research 2019.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: This paper shows that greater global spatial correlation of productivities can increase cross-country welfare dispersion by increasing the correlation between a country's productivity and its gains from trade. We validate this prediction using a global climatic phenomenon as a natural experiment. We find that gains from trade in cereals over the last half-century were larger for more productive countries and smaller for less productive countries when cereal productivity was more spatially correlated. Incorporating this role for spatial interdependence into a projection of climate-change impacts raises projected international inequality, with higher welfare losses across most of Africa.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
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January 2019.

This paper shows that greater global spatial correlation of productivities can increase cross-country welfare dispersion by increasing the correlation between a country's productivity and its gains from trade. We validate this prediction using a global climatic phenomenon as a natural experiment. We find that gains from trade in cereals over the last half-century were larger for more productive countries and smaller for less productive countries when cereal productivity was more spatially correlated. Incorporating this role for spatial interdependence into a projection of climate-change impacts raises projected international inequality, with higher welfare losses across most of Africa.