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Trade and endogenous production structures

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Author Info
Satish Chand () (Asia Pacific School of Economics and Government, Australian National University)

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Abstract

This paper presents a simple model that is able to account for three stylised facts about international trade. First, splicing of value-adding promotes trade in the abundant factor of an economy. Second, trade in intermediate inputs rises as costs of such trade fall but that free trade is not sufficient to eradicate unemployment of the abundant factor. Third, productivity growth is lower in labour-abundant economies than in the capital-abundant economies.

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File URL: http://www.eaber.org/intranet/documents/22/557/APSEG_Chand_01.pdf
File Format: application/pdf
File Function: First Version, 2005
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Publisher Info
Paper provided by East Asian Bureau of Economic Research in its series Trade Working Papers with number 557.

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Length: 11 pages
Date of creation: Jul 2001
Date of revision:
Handle: RePEc:eab:tradew:557

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Postal: JG Crawford Building #13, Asia Pacific School of Economics and Government, Australian National University, ACT 0200
Web page: http://www.eaber.org
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Related research
Keywords: trade endogenous production structures value-adding free-trade productivity growth

Find related papers by JEL classification:
F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
O24 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

References listed on IDEAS
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  1. Sanyal, Kalyan K & Jones, Ronald W, 1982. "The Theory of Trade in Middle Products," American Economic Review, American Economic Association, vol. 72(1), pages 16-31, March. [Downloadable!] (restricted)
  2. Lucas, Robert E, Jr, 1990. "Why Doesn't Capital Flow from Rich to Poor Countries?," American Economic Review, American Economic Association, vol. 80(2), pages 92-96, May. [Downloadable!] (restricted)
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This page was last updated on 2008-9-20.

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