Essays on International Trade and Development

This dissertation consists of three distinct essays on international trade and development economics.;Chapter 1 examines the role of relative product diversification in inducing expenditure-switching under an imperfect goods market for 30 countries from 1986 to 2006. We find heterogeneity in effects by level of income, choice of exchange rate regime and currency area. Second, relative diversification is not found to deepen the expenditure-switching capacity of monetary policy. Finally, findings support the assumptions of exchange rate pass-though and non-neutrality of money.;Chapter 2 assesses spillover effects from expansion of the extensive margin of merchandise exports on aggregate demand for labor through the export markets of 23 African economies from 1995 to 2007. Iterated Generalized Least Squares (IGLS) estimation results indicate that an increase in the extensive margin of merchandise exports is associated with a higher equilibrium value of merchandise exports. Second, Instrumental Variable (IV) estimation shows positive spillover effects of the extensive margin of merchandise exports on aggregate employment.;Chapter 3 examines the externalities that accrue to the United States of America when the trading-partner sample of 19 countries increases Research and Development (R&D) expenditures. Three channels of foreign technology transfer analyzed through international inflows include imports, Foreign Direct Investment (FDI) and immigration. Through these channels, foreign technology affects domestic Total Factor Productivity (TFP), calibrated using Newey-West estimation. We examine the effects of domestic expenditures on Basic, Applied and Experimental R&D on TFP. Empirical results reveal that immigration and imports are channels of transfer of foreign technology. It is also found that domestic expenditures in Basic and Experimental research enhance the level of technology. Thus, the type of research expenditures matters in altering the level of technology.