The World Trade Organization (WTO) has announced Carlos Góes as the winner of the 2024 Essay Award for Young Economists. Góes's paper examines the mechanisms through which trade integration can lead to product innovation.
“I explain how trade can induce countries and firms to introduce new products into the economy, thereby increasing economic growth. And I show that gains from trade are much larger than we knew before in the typical literature,” Góes stated.
“This is a great award, a very good surprise. The list of winners before is pretty remarkable so it was surprising and very rewarding to have received this award,” he added.
Góes's paper makes significant theoretical, empirical, and quantitative contributions to trade economics. Contrary to traditional trade theory—which suggests increased economic integration leads countries to produce a narrower range of goods—empirical evidence shows that EU member countries have produced more product varieties, invested more in research and development (R&D), and traded more than candidate countries that have not yet joined the EU. The paper highlights substantial dynamic gains from trade, suggesting that previous literature may have significantly underestimated these gains. It estimates that dynamic gains from trade account for 65-90 percent of the total welfare gains from the 2004 enlargement of the EU when ten countries joined.
In their evaluation, the Selection Panel described Góes's work as an “impressive paper” exploring the impacts of changes in market access (trade costs) on growth rates and welfare with a “magistral mastering” of theoretical and quantitative economic tools.
Carlos Góes is a Brazilian national and a Ph.D. candidate in economics at the University of California, San Diego.
The Selection Panel comprised Beata Javorcik (Professor of Economics, University of Oxford), Ralph Ossa (Director, Economic Research and Statistics Division, WTO), Robert Staiger (Professor of Economics, Dartmouth University), and Alberto Trejos (Professor of Economics, INCAE Business School). Roberta Piermartini (Chief of Section, Economic Research and Statistics Division, WTO) coordinated their work.