Trade, development, and poverty-induced comparative advantage
AbstractThis paper deals with the relation between trade and development when poverty affects individual decision making. We develop a two-sector model that links production and schooling decisions under poverty with standard neo-classical trade analyses. The decision to either work or acquire skills depends on households having reached subsistence levels of income, implying that the income level of a country becomes important in establishing comparative advantages and trade patterns. Trade liberalisation is always allocative efficient, but its timing is important for the speed by which countries industrialise. Our analysis supports the idea that there are instances that stalling trade liberalisation may serve industrial development.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal The Journal of International Trade & Economic Development.
Volume (Year): 20 (2011)
Issue (Month): 2 ()
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- Robbert Maseland & Albert de Vaal, 2007. "The Debate about Trade: Some small steps towards one," Papers of the Annual IUE-SUNY Cortland Conference in Economics, in: Proceedings of the Conference on Globalization and Its Discontents, pages 83-101 Izmir University of Economics.
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