Jun 19, 2026 · 0 min · 12 segments
Bob sits down with Harvard Economics Professor Pol Antràs to discuss his new paper applying Böhm-Bawerk's average period of production to international trade, testing whether countries with lower…
Pol AntràsGuest
Bob MurphyHost
And to answer your question, I saw you cite that book and, you know, sort of given the history and the paper as to like what led us down this path.
one time i gave some kind of a presentation in in actually the i don't know if they call it central bank but like a bank office in vienna it was kind of funny because i was basically giving a presentation saying why the central bank shouldn't exist or something but anyway so it was it was interesting all right well let me i think maybe paul um for the benefit of the listeners here, maybe I'll just read the abstract of your paper and then we can start going through.
Obviously, we're not going to get into like equation 16, so such and such, but maybe just to give them the big picture.
We develop a general equilibrium model of international trade in which the temporal structure of production is a key determinant of comparative advantage.
Building on Bombavik's theory of capital, the model formalizes the idea that production processes with longer average periods of production, or APPs, entail higher financing costs due to the time lag between input payments and revenue realization.
We embed this insight into a multi-sector Ricardian framework with endogenous interest rates.
Under autarky, countries with more patient consumers or more developed financial markets exhibit lower equilibrium interest rates and higher wage rates.
With international trade, these countries typically gain a comparative advantage in sectors with longer APPs, though the model can also generate multiple equilibria and unconventional specialization patterns.
We extend the framework to include trade costs, global value change, and international capital market integration – And then finally, empirically, we present evidence showing that countries with more developed financial systems export disproportionately more in sectors with longer APPs, even after controlling for standard neoclassical and institutional determinants of comparative advantage.
I was going to be kind of snarky and say like, Oh, so it's like Bombavik meets Krugman.
And to answer your question, I saw you cite that book and, you know, sort of given the history and the paper as to like what led us down this path.
one time i gave some kind of a presentation in in actually the i don't know if they call it central bank but like a bank office in vienna it was kind of funny because i was basically giving a presentation saying why the central bank shouldn't exist or something but anyway so it was it was interesting all right well let me i think maybe paul um for the benefit of the listeners here, maybe I'll just read the abstract of your paper and then we can start going through.
Obviously, we're not going to get into like equation 16, so such and such, but maybe just to give them the big picture.
We develop a general equilibrium model of international trade in which the temporal structure of production is a key determinant of comparative advantage.
Building on Bombavik's theory of capital, the model formalizes the idea that production processes with longer average periods of production, or APPs, entail higher financing costs due to the time lag between input payments and revenue realization.
We embed this insight into a multi-sector Ricardian framework with endogenous interest rates.
Under autarky, countries with more patient consumers or more developed financial markets exhibit lower equilibrium interest rates and higher wage rates.
With international trade, these countries typically gain a comparative advantage in sectors with longer APPs, though the model can also generate multiple equilibria and unconventional specialization patterns.
We extend the framework to include trade costs, global value change, and international capital market integration – And then finally, empirically, we present evidence showing that countries with more developed financial systems export disproportionately more in sectors with longer APPs, even after controlling for standard neoclassical and institutional determinants of comparative advantage.
I was going to be kind of snarky and say like, Oh, so it's like Bombavik meets Krugman.
The rest of this transcript — segmented and speaker-labeled, so you land on the exact moment something was said
Search every transcript — by keyword, by phrase, or by meaning, across every show Radar indexes
Trends — what is surging across podcasts, measured against its own baseline
Alerts — when a name you follow appears in a newly indexed episode
No account is needed to search Radar.
