Is free trade really good for growth? Is it good for both industrialized and non-industrialized countries? Although the profession would lean towards saying that free trade is always good for growth, for all types of countries, my job market paper shows that free trade has actually been detrimental for growth in non-industrialized countries and only beneficial for industrialized ones 😨. Take a look here: mathoyosgit.github.io/mathoyos
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@mathoyos Hello. I really enjoyed reading this paper, even if the mathematics are beyond me. Your conclusions have made me start to puzzle over how the effects you mention may be interacting with the simultaneous changes in immigration policies over the same time frame. "The brain drain" theory specifically. My first inclination would be to assume that in less developed countries that are more reliant on traditional exports, when trade is liberalized with more advanced manufacturers, that the capital owning classes would be more incentivized to continue or expand the traditional industries and import complex goods, rather than invest in manufacturing at home. This then leads to much higher income inequality, since agricultural workers etc.. will not experience the wage increases of a manfacturing middle class. This in turn, incentivizes the most educated and outgoing individuals from those countries to seek to migrate to manufacturer countries where the quality of life has improved more substantially and they can find skilled employment. So I would be curious to test this. Has the increase of immigration targets in more developed countries compounded the effects you have described in your paper? Is the drive towards globalization (in terms of trade and immigration) benefitting the wealthy countries while suppressing the developing ones? So much still to explore! Sorry for the longwinded reply, you have gotten me excited on this topic.

@Clementulus Thanks for reading and glad you enjoyed it! Very interesting what you mention. The immigration channel you mention might reinforce the heterogeneous effects. It actually might be worth to explore this in the future!

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