Technological Progress, Terms of Trade, and Monopolistic Competition
AbstractThis paper examines welfare implications of technological progress in the new trade model with monopolistic competition. Our result shows that labor-augmenting technological progress turns the terms of trade against the growing country while capital-augmenting technological progress shifts them in favor of the growing country. Unlike the Findlay-Grubert theorem, both technological progresses are welfare-enhancing. The key channel for this welfare effect is the love of variety in the new trade model.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal International Economic Journal.
Volume (Year): 21 (2007)
Issue (Month): 1 ()
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Web page: http://www.tandfonline.com/RIEJ20
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- Kwok Tong Soo, 2013. "Intra-industry trade," Working Papers 33867578, Lancaster University Management School, Economics Department.
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