The article by Alessandro Barattieri “Comparative Advantage, service trade, and global imbalances” has been published on the Journal of International Economics. The article documents the emergence from the mid-nineties of a strong negative relation between the relative specialization in the export of services and the current account balances of a large sample of OECD and developing countries. Starting from this new fact, never observed before, the article proposes a new explanation for the formation of global imbalances: the “service hypothesis”. The focus of this theory is the interplay between the comparative advantage of the U.S. in services and the asymmetric trade liberalization process in goods versus service trade that took place in the last two decades, particularly since the mid-nineties. The most important policy implication of the service hypothesis is that liberalization of trade in services represents a new possible margin of adjustment that might help alleviate global imbalances.
Comparative Advantage, Service Trade, and Global Imbalances,
Journal of International Economics, Vol. 92, January 2014, pages 1-13. Appendix