@article{8158b4c89e7a40e9a6bbce77c722f5e2,
title = "Tradability and Sectoral Productivity Differences Across Countries",
abstract = "Different models of economic development point to different sectors as importantto understanding cross-country productivity differences. In this paper we argue thattraded versus non-traded is a key distinction as we find that only productivity in thetraded sector varies systematically with a country{\textquoteright}s income level. In comparison,other two-way splits are less distinctive. We base our analysis on newly developedmeasures of sectoral relative prices and productivity for 84 countries across 3 years.These data incorporate several recent measurement advances allowing us to relaxthe common assumption of efficient labor markets, and we measure prices of sec-toral value added instead of assuming that these are well-approximated by pricesof final expenditure. These measurement improvements, as well as recognizing thetradability of certain services industries, are important to our main finding. Theseresults emphasize the importance of reducing trade costs for enhancing productivity.",
author = "Robert Inklaar and Ryan Marapin and Kaira Gr{\"a}ler",
year = "2024",
month = dec,
day = "26",
doi = "10.1057/s41308-024-00271-w",
language = "English",
journal = "IMF Economic Review",
issn = "2041-4161",
publisher = "PALGRAVE MACMILLAN LTD",
}