Insights / Research BriefJan 23, 2024

Neoclassical Growth in an Interdependent World

Benny Kleinman, Ernest Liu, Stephen J. Redding, Motohiro Yogo
A new growth model of the global economy that features frictional and imperfectly-substitutable flows of goods and capital between countries allows researchers to study the dynamic responses of countries around the world to changes in trade and investment frictions and can be applied to the economic “decoupling” between China and the United States.