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Trade Dynamics and Endogenous Growth: An Overlapping-Generations Analysis

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Mountford, Andrew

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Abstract

This paper examines the dynamic implications of international trade in a two-sector overlapping-generations economy with endogenous growth. It analyzes the global dynamics of this model for both a closed economy and a two-country world economy. It shows how international trade can cause the world economy to sort itself out into groups of fast and slow-growing economies and can also cause one country to catch up and overtake another's growth rate. It, thus, provides theoretical support for empirical papers that find that the world distribution of income is diverging. Copyright 1999 by The London School of Economics and Political Science

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Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 66 (1999)
Issue (Month): 262 (May)
Pages: 209-24
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Handle: RePEc:bla:econom:v:66:y:1999:i:262:p:209-24

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  1. Yoshiyasu Ono & Akihisa Shibata, 2006. "Capital Income Taxation and Specialization Patterns: Investment Tax vs. Saving Tax," KIER Working Papers 613, Kyoto University, Institute of Economic Research. [Downloadable!]
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  2. Claustre Bajona & Timothy J. Kehoe, 2006. "Demographics in Dynamic Heckscher-Ohlin Models: Overlapping Generations Versus Infinitely Lived Consumers," NBER Working Papers 12566, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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