The Global Economics of Water: Is Water a Source of Comparative Advantage?

With newly available data, I investigate to what extent countries' international trade exploits the very uneven water resources on a global scale. I find that water is a source of comparative advantage and that relatively water abundant countries export more water-intensive products. Additionally, water contributes significantly less to the pattern of exports than the traditional production factors labor and physical capital. This suggests relatively moderate disruptions to overall trade on a global scale due to changing precipitation in the wake of climate change. (JEL F14, O13, O19, Q15, Q25, Q54)