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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 L
  • 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

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2291.

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Date of creation: Nov 1999
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Handle: RePEc:cpr:ceprdp:2291

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Related research

Keywords: Distribution; Economic Growth; Gains from Trade;

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References

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  1. Grossman, Gene M & Helpman, Elhanan, 1990. "Comparative Advantage and Long-run Growth," American Economic Review, American Economic Association, vol. 80(4), pages 796-815, September.
  2. Daron Acemoglu & Fabrizio Zilbotti, 1999. "Productivity Differences," NBER Working Papers 6879, National Bureau of Economic Research, Inc.
  3. H.W. Arndt, 1998. "Globalisation," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 51(204), pages 73-89.
  4. Feenstra, Robert C., 1996. "Trade and uneven growth," Journal of Development Economics, Elsevier, vol. 49(1), pages 229-256, April.
  5. 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.
  6. Grossman, G.M. & Helpman, E., 1989. "Quality Ladders And Product Cycles," Papers 39-89, Tel Aviv.
  7. Helpman, E., 1992. "Innovation, Imitation and intellectual Property Rights," Harvard Institute of Economic Research Working Papers 1597, Harvard - Institute of Economic Research.
  8. Barro, Robert J. & Sala-i-Martin, Xavier, 1995. "Technological Diffusion, Convergence and Growth," CEPR Discussion Papers 1255, C.E.P.R. Discussion Papers.
  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. 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.
  11. Grossman, G.M. & Helpman, E., 1989. "Endogemour Product Cycles," Papers 10-89, Tel Aviv.
  12. Martin L. Weitzman, 1998. "Recombinant Growth," The Quarterly Journal of Economics, MIT Press, vol. 113(2), pages 331-360, May.
  13. David Currie & Paul Levine & Joeseph Pearlman & Michael Chui, 1996. "Phases of Imitation and Innovation in a North-South Endogenous Growth Model," School of Economics Discussion Papers 9602, School of Economics, University of Surrey.
  14. Segerstrom, Paul S, 1991. "Innovation, Imitation, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 807-27, August.
  15. 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.
  16. H.W. Arndt, 1998. "Globalisation," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 51(204), pages 73-89.
  17. Wood, Adrian, 1995. "North-South Trade, Employment and Inequality: Changing Fortunes in a Skill-Driven World," OUP Catalogue, Oxford University Press, number 9780198290155.
  18. 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.
  19. 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.
  20. Grossman, G.M. & Helpman, E., 1989. "Endogenous Prduct Cycles," Papers 144, Princeton, Woodrow Wilson School - Public and International Affairs.
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Citations

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Cited by:
  1. Angus C. Chu, 2009. "Macroeconomic Effects of Intellectual Property Rights: A Survey," IEAS Working Paper : academic research 09-A007, Institute of Economics, Academia Sinica, Taipei, Taiwan.
  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. Paul Levine & Emanuela Lotti & Joseph Pearlman, 2003. "The Immigration Surplus Revisited in a General Equilibrium Model with Endogenous Growth," School of Economics Discussion Papers 0203, School of Economics, University of Surrey.

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