A Factor Endowment Theory of Endogenous Growth and International Trade
AbstractThe Frankel-Romer-Lucas theory of endogenous growth rests on the assumption of knowledge-based externalities and price-taking representative households. It is argued that, in a context of long-run growth, these assumptions are mutually incompatible (that representative households will co-operate to internalize the externalities) and that therefore the relevance of the theory must be questioned. In the present paper we offer a model of endogenous growth, based on representative households but recognizing that, in a context of long-run growth, the households must cooperate. Our economy consists of many countries, populated by households which are identical within countries but not necessarily across countries. In each country, government expenditure on a public intermediate good plays a crucial role in the realization of persistent growth. It is shown that the long-run pattern of international trade is determined in a Heckscher-Ohlin manner.
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Bibliographic InfoPaper provided by Research Institute for Economics & Business Administration, Kobe University in its series Discussion Paper Series with number 150.
Length: 27 pages
Date of creation: Mar 2004
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- Yunfang Hu & Murray C. Kemp & Koji Shimomura, 2005. "A Factor Endowment Theory of Endogenous Growth and International Trade," Review of Development Economics, Wiley Blackwell, vol. 9(4), pages 467-481, November.
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- Hu, Yunfang & Ohdoi, Ryoji & Shimomura, Koji, 2008.
"Indeterminacy in a two-sector endogenous growth model with productive government spending,"
Journal of Macroeconomics,
Elsevier, vol. 30(3), pages 1104-1123, September.
- Yunfang Hu & Ryoji Ohdoi & Koji Shimomura, 2004. "Indeterminacy in a Two-sector Endogenous Growth Model with Productive Government Spending," Discussion Paper Series 149, Research Institute for Economics & Business Administration, Kobe University.
- Takumi Naito & Ryoji Ohdoi, 2011. "A two-country model of trade and growth with intersectoral knowledge spillovers," Journal of Economics, Springer, vol. 103(1), pages 39-58, May.
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