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The Elixir of Growth: Trade, Non-Traded Goods and Development

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  • Minford, Patrick
  • Nowell, Eric
  • Riley, Jonathan

Abstract

Development and convergence is explained as the transfer of technology embodied in machinery, to the manufacturing sector of those developing countries that institute the necessary property rights. The process is modelled within a Heckscher-Ohlin-Samuelson framework with capital mobility and endogenous supplies of immobile factors, skilled and unskilled labour and land. The model suggests a factor-price-based PPP method of measuring developing countries' GDP. Model simulations of the assumed technical transfer to developing countries imply falling wages and employment of unskilled labour in developed countries, combined with improvements in their terms of trade - shared gains from trade combined with a distributional bias.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1165.

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Date of creation: May 1995
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Handle: RePEc:cpr:ceprdp:1165

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Related research

Keywords: Development; Technological Transfer; Unemployment; Unskilled Labour; Wage Dispersion;

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Cited by:
  1. Olivier Bontout & Sébastien Jean, 1998. "Sensibilité des salaires relatifs aux chocs exogènes de commerce international et de progrès technique: une évaluation d'équilibre général," Working Papers 1998-09, CEPII research center.
  2. Gundlach, Erich & Nunnenkamp, Peter, 1997. "Labor markets in the global economy: how to prevent rising wage gaps and unemployment," Kiel Discussion Papers 305, Kiel Institute for the World Economy (IfW).

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