Capital Services in Global Value Chains
Abstract
Abstract This article constructs the first global data set on intersectoral capital service expenditures. I use these data to disaggregate capital services and intermediate inputs in a dynamic multisector trade model. Steady-state allocations and responses to shocks are determined by a capital-augmented global input-output matrix. Two properties of the measured network deliver larger long-run consumption gains from globalization than existing estimates, as well as larger gains in more capital-intensive countries. First, more trade-exposed sectors supply capital to more consumption-influential producers. Second, heterogeneity in the network reallocates sectoral expenditures toward producers with larger declines in capital rental prices. These reallocations raise capital incomes and lower consumption price indices.
Fields of Study & Subjects
Global trade and economics
Global trade
sustainability
and social impact
Economic Theory and Policy
Publication details
- Journal / source
- The Quarterly Journal of Economics
- Publisher
- Oxford University Press (OUP)
- Volume
- 141
- Issue
- 4
- Pages
- 3447-3503
- Publication date
- 28 July 2026
- Language
- EN