Monday 11 March 2019

Spatial correlation and inequality

a column by Jonathan Dingel and Kyle Meng for VOX: CEPR’s Policy Portal

Climate change is expected to reshape the global distribution of productivities. In theory, shifts in the spatial structure of economic conditions will affect international inequality by altering the pattern of international trade. In practice, it is hard to identify natural experiments to causally validate predictions about global conditions.

This column describes research that exploits a global climatic phenomenon to estimate the general equilibrium consequences of changes in the spatial correlation of productivities.

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