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Comparative Advantage And Long-Run Growth

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Author Info

  • GROSSMAN, G.M.
  • HELPMAN, E.

Abstract

We construct a dynamic, two-country model of trade and growth in which endogenous technological progress results from the profit-maximizing behavior of entrepreneurs. We study the role that the external trading environment and that trade and industrial policies play in the determination of long-run growth rates. We find that cross-country differences in efficiency at R&D versus manufacturing (i.e. comparative advantage) bear importantly on the growth effects of economic structure and commercial policies. Our analysis allows for both natural and acquired comparative advantage, and we discuss the primitive determinants of the latter.

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Bibliographic Info

Paper provided by Tel Aviv in its series Papers with number 39-88.

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Length: 45 pages
Date of creation: 1988
Date of revision:
Handle: RePEc:fth:teavfo:39-88

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Postal: Israel TEL-AVIV UNIVERSITY, THE FOERDER INSTITUTE FOR ECONOMIC RESEARCH, RAMAT AVIV 69 978 TEL AVIV ISRAEL.
Phone: 972-3-640-9255
Fax: 972-3-640-5815
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Web page: http://econ.tau.ac.il/research/foerder.asp
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Keywords: comparative advantage ; research and development ; commercial policy ; technological change;

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