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Dynamics of Trade Integration and Technological Convergence

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  • Robert Stehrer

Abstract

The issue of the impact of trade on economic performance and labour markets has been intensively discussed in recent literature on trade liberalization and globalization, where the debate was mainly about identifying the relative impact of trade and technology. The bulk of the existing literature in this area employs, almost without exception, a static Heckscher-Ohlin framework that seems not to be a suitable tool for analysing the ongoing dynamics. This paper presents a dynamic multi-sectoral framework with heterogenous labour to explore the issue of trade liberalization and sectoral catching-up in productivity levels. The model is basically an input-output framework with Schumpeterian features; the latter are modelled as the impact of transitory rents that result from uneven productivity growth and technological catching-up upon the price and quantity systems of the trading economies. Relative productivity and wage rate dynamics across sectors determine the comparative costs and the dynamics of trade specialization. In the Appendix, the equilibrium solutions of the model are derived.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Economic Systems Research.

Volume (Year): 14 (2002)
Issue (Month): 3 ()
Pages: 219-244

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Handle: RePEc:taf:ecsysr:v:14:y:2002:i:3:p:219-244

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Related research

Keywords: Trade Liberalization; Economic Integration; Labour Markets; Economic Dynamics;

References

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  1. Berman, Eli & Bound, John & Griliches, Zvi, 1994. "Changes in the Demand for Skilled Labor within U.S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 367-97, May.
  2. Adrian Wood, 1995. "How Trade Hurt Unskilled Workers," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 57-80, Summer.
  3. Edward E. Leamer, 1994. "Trade, Wages and Revolving Door Ideas," NBER Working Papers 4716, National Bureau of Economic Research, Inc.
  4. Goodwin, Richard M, 1986. "Swinging along the Turnpike with von Neumann and Sraffa," Cambridge Journal of Economics, Oxford University Press, vol. 10(3), pages 203-10, September.
  5. Robert Stehrer & Julia Wörz, 2003. "Technological convergence and trade patterns," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 139(2), pages 191-219, June.
  6. Medio,Alfredo & Gallo,Giampaolo, 1995. "Chaotic Dynamics," Cambridge Books, Cambridge University Press, number 9780521484619, October.
  7. Landesmann, Michael A. & Stehrer, Robert, 2001. "Convergence patterns and switchovers in comparative advantage," Structural Change and Economic Dynamics, Elsevier, vol. 12(4), pages 399-423, December.
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Citations

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Cited by:
  1. Michael A. Landesmann, 2003. "Structural features of economic integration in an enlarged Europe: patterns of catching-up and industrial specialisation," European Economy - Economic Papers 181, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  2. Sandu, Steliana & Paun, Cristian, 2010. "Assessing The Possibilities Of Filling The Gap Between Romania And The Eu In The Rdi Field," Working Papers of National Institute of Economic Research 100204, National Institute of Economic Research.
  3. Robert Stehrer, 2005. "Employment, Education and Occupation Structures: A Framework for Forecasting," wiiw Research Reports 315, The Vienna Institute for International Economic Studies, wiiw.
  4. Michael Landesmann & Robert Stehrer, 2006. "Goodwin's Structural Economic Dynamics: Modelling Schumpeterian and Keynesian Insights," wiiw Working Papers 41, The Vienna Institute for International Economic Studies, wiiw.

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