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Export Promotion, Learning by Doing and Growth

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Abstract

This paper explores the quantitative link between export-promoting commercial policies and economic growth. We build and calibrate a dynamic general equilibrium model of a small developing economy. The economy's equilibrium is suboptimal due to monopolistic competition in the manufacturing sector and a human capital accumulation externality. Second-best commercial policy that promotes exports in the sector with the externality can lead to an increase in both welfare and growth rates. We show that export-promoting policies can lead to substantial quantitative increases in steady-state growth for a wide range of parameter values. Nous examinons dans ce texte le lien quantitatif entre les politiques commerciales qui encouragent les exportations d'une part et, d'autre part, la croissance économique. Nous développons et étalonnons un modèle dynamique d'équilibre général d'un petite économie en voie de développement. L'équilibre de l'économie est sous-optimal à cause de la concurrence monopolistique dans le secteur manufacturier et à cause d'une externalité au niveau de l'accumulation du capital humain. Des politiques commerciales de second rang qui encouragent les exportations dans le secteur où il y a l'externalité peuvent simultanément améliorer le bien-être et faire augmenter le taux de croissance. Nous montrons que de telles politiques peuvent avoir des effets importants sur la croissance pour une gamme de valeurs de paramètres assez large.

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Bibliographic Info

Paper provided by CREFE, Université du Québec à Montréal in its series Cahiers de recherche CREFE / CREFE Working Papers with number 27.

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Date of creation: Jun 1994
Date of revision: Jul 1996
Handle: RePEc:cre:crefwp:27

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Keywords: Export Promotion; Learning by Doing; Growth;

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References

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  1. Albert Marcet & Ramon Marimon, 1991. "Communication, commitment and growth," Economics Working Papers 1, Department of Economics and Business, Universitat Pompeu Fabra.
  2. Catherine J. Morrison, 1990. "Market Power, Economic Profitability and Productivity Growth Measurement: An Integrated Structural Approach," NBER Working Papers 3355, National Bureau of Economic Research, Inc.
  3. Young, Alwyn, 1991. "Learning by Doing and the Dynamic Effects of International Trade," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 369-405, May.
  4. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-51, April.
  5. Colin I. Bradford, Jr. & William H. Branson, 1987. "Trade and Structural Change in Pacific Asia," NBER Books, National Bureau of Economic Research, Inc, number brad87-1, May.
  6. Michael B. Devereux & Allen C. Head & Beverly J. Lapham, 1993. "Exit and Entry, Increasing Returns to Specialization, and Business Cycles," Working Papers 871, Queen's University, Department of Economics.
  7. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  8. Robert E Lucas, 1999. "Making a Miracle," Levine's Working Paper Archive 2101, David K. Levine.
  9. Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," NBER Working Papers 3577, National Bureau of Economic Research, Inc.
  10. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
  11. 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.
  12. Olivier Jean Blanchard & Stanley Fischer, 1989. "Lectures on Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262022834, December.
  13. Luis A. Rivera-Batiz & Paul M. Romer, 1990. "Economic Integration and Endogenous Growth," NBER Working Papers 3528, National Bureau of Economic Research, Inc.
  14. Young, Alwyn, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 641-80, August.
  15. Mendoza, Enrique G, 1991. "Real Business Cycles in a Small Open Economy," American Economic Review, American Economic Association, vol. 81(4), pages 797-818, September.
  16. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
  17. Ethier, Wilfred, 1979. "Internationally decreasing costs and world trade," Journal of International Economics, Elsevier, vol. 9(1), pages 1-24, February.
  18. Steve Ambler & Alain Paquet, 1994. "Recursive Methods for Computing Equilibria of General Equilibrium Dynamic Stackelberg Games," Cahiers de recherche CREFE / CREFE Working Papers 25, CREFE, Université du Québec à Montréal.
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Cited by:
  1. Mage-Bertomeu, Sabine, 2006. "Les modèles d'équilibre général appliqués à la politique commerciale : développements récents," Economics Papers from University Paris Dauphine 123456789/1696, Paris Dauphine University.
  2. Joshua Aizenman & Jaewoo Lee, 2008. "The Real Exchange Rate, Mercantilism and the Learning by Doing Externality," NBER Working Papers 13853, National Bureau of Economic Research, Inc.
  3. Dissou, Yazid & Mac Leod, Carolyn & Souissi, Mokhtar, 2002. "Compliance costs to the Kyoto Protocol and market structure in Canada: a dynamic general equilibrium analysis," Journal of Policy Modeling, Elsevier, vol. 24(7-8), pages 751-779, November.

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