Trade and endogenous product structures
AbstractThis 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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Bibliographic InfoPaper provided by International and Development Economics in its series International and Development Economics Working Papers with number idec01-7.
Length: 9 pages
Date of creation: 2001
Date of revision:
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Find related papers by JEL classification:
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- F19 - International Economics - - Trade - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-12-12 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- 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.
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