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Winners and losers in a North-South model of growth, innovation and product cycles

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  • Chui, Michael
  • Levine, Paul
  • Pearlman, Joseph

Abstract

The paper examines the welfare gains from North-South trade and their distribution. We construct an endogenous growth North-South model with four Southern stages of development as possible equilibria: specialisation in a traditional good; the South in addition copies Northern high-tech manufactured goods; the South begins to innovate in its own right and finally a stage in which the South only innovates, as in the North. We use this model to show that dynamic gains from trade and from Southern development through the stages can create new winners, unskilled workers in the North and possibly skilled workers in the South.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 65 (2001)
Issue (Month): 2 (August)
Pages: 333-365

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Handle: RePEc:eee:deveco:v:65:y:2001:i:2:p:333-365

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Web page: http://www.elsevier.com/locate/devec

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References

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  1. Martin L. Weitzman, 1995. "Recombinant Growth," Harvard Institute of Economic Research Working Papers 1722, Harvard - Institute of Economic Research.
  2. Elhanan Helpman, 1992. "Innovation, Imitation, and Intellectual Property Rights," NBER Working Papers 4081, National Bureau of Economic Research, Inc.
  3. Grossman, G.M. & Helpman, E., 1989. "Quality Ladders And Product Cycles," Papers 152, Princeton, Woodrow Wilson School - Public and International Affairs.
  4. H.W. Arndt, 1998. "Globalisation," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 51(204), pages 73-89.
  5. van Elkan, Rachel, 1996. "Catching up and slowing down: Learning and growth patterns in an open economy," Journal of International Economics, Elsevier, vol. 41(1-2), pages 95-111, August.
  6. Feenstra, Robert C., 1996. "Trade and uneven growth," Journal of Development Economics, Elsevier, vol. 49(1), pages 229-256, April.
  7. Barro, Robert J. & Sala-i-Martin, Xavier, 1995. "Technological Diffusion, Convergence and Growth," CEPR Discussion Papers 1255, C.E.P.R. Discussion Papers.
  8. Edwards, Sebastian, 1993. "Openness, Trade Liberalization, and Growth in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1358-93, September.
  9. Leamer, Edward E, 1987. "Paths of Development in the Three-Factor, n-Good General Equilibrium Model," Journal of Political Economy, University of Chicago Press, vol. 95(5), pages 961-99, October.
  10. Daron Acemoglu & Fabrizio Zilibotti, 2001. "Productivity Differences," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 563-606, May.
  11. Krugman, Paul, 1979. "A Model of Innovation, Technology Transfer, and the World Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 253-66, April.
  12. Gene M. Grossman & Elhanan Helpman, 1989. "Endogenous Product Cycles," NBER Working Papers 2913, National Bureau of Economic Research, Inc.
  13. Currie, David, et al, 1999. "Phases of Imitation and Innovation in a North-South Endogenous Growth Model," Oxford Economic Papers, Oxford University Press, vol. 51(1), pages 60-88, January.
  14. Wood, Adrian, 1995. "North-South Trade, Employment and Inequality: Changing Fortunes in a Skill-Driven World," OUP Catalogue, Oxford University Press, number 9780198290155.
  15. Grossman, G.M. & Helpman, E., 1988. "Comparative Advantage And Long-Run Growth," Papers 39-88, Tel Aviv.
  16. Lai, Edwin L. -C., 1998. "International intellectual property rights protection and the rate of product innovation," Journal of Development Economics, Elsevier, vol. 55(1), pages 133-153, February.
  17. Arnold, Lutz G., 2002. "On the growth effects of North-South trade: the role of labor market flexibility," Journal of International Economics, Elsevier, vol. 58(2), pages 451-466, December.
  18. H.W. Arndt, 1998. "Globalisation," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 51(204), pages 73-89.
  19. Segerstrom, Paul S, 1991. "Innovation, Imitation, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 807-27, August.
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Citations

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Cited by:
  1. Stephen Drinkwater & Paul Levine & Emanuela Lotti & Joseph Pearlman, 2007. "The Immigration Surplus Revisited In A General Equilibrium Model With Endogenous Growth," Journal of Regional Science, Wiley Blackwell, vol. 47(3), pages 569-601.
  2. Jaume Ventura, 2005. "A Global View of Economic Growth," Working Papers 203, Barcelona Graduate School of Economics.
  3. Mondal, Debasis & Ranjan Gupta, Manash, 2009. "Endogenous imitation and endogenous growth in a North-South model: A theoretical analysis," Journal of Macroeconomics, Elsevier, vol. 31(4), pages 668-684, December.
  4. Chu, Angus C., 2009. "Macroeconomic Effects of Intellectual Property Rights: A Survey," MPRA Paper 17342, University Library of Munich, Germany.

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