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Trade, Non-Scale Growth, and Uneven Development

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  • Hiroaki Sasaki
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    Abstract

    This paper investigates the relationship between trade and economic development using a two-country, non-scale-growth model. Depending on the share of the expenditure for manufactured goods, we obtain two di erent results with regard to long-run production patterns. If the share of the expenditure is less than or equal to half, the leader country diversifies while the follower country asymptotically specializes in agriculture completely. If, on the other hand, the share of the expenditure is more than half, the leader country completely specializes in manufacturing while the follower country asymptotically specializes in agriculture completely. Whether or not the follower country can catch up with the leader country in the long run depends on two factors: (1) the patterns of production in both countries and (2) the measure of economic welfare that is used, that is, per capita income or per capita consumption.

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    File URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-10-002.pdf
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    Bibliographic Info

    Paper provided by Graduate School of Economics Project Center, Kyoto University in its series Discussion papers with number e-10-002.

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    Length: 35 pages
    Date of creation: Jun 2010
    Date of revision:
    Handle: RePEc:kue:dpaper:e-10-002

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    Related research

    Keywords: international trade; non-scale growth; uneven development;

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    References

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    1. Gabriel J. Felbermayr, 2007. "Specialization on a technologically stagnant sector need not be bad for growth," Oxford Economic Papers, Oxford University Press, vol. 59(4), pages 682-701, October.
    2. Prabirjit Sarkar, 2009. "A Centre-Periphery Framework on Kaldorian Lines," Review of Political Economy, Taylor & Francis Journals, vol. 21(3), pages 393-401.
    3. Christiaans, Thomas, 2004. "Types of balanced growth," Economics Letters, Elsevier, vol. 82(2), pages 253-258, February.
    4. Molana, Hassan & Vines, David, 1988. "North-South Growth and the Terms of Trade," CEPR Discussion Papers 248, C.E.P.R. Discussion Papers.
    5. Peter Skott & Rajiv Sethi, 2000. "Uneven Development and Bilateral Conflict," Metroeconomica, Wiley Blackwell, vol. 51(4), pages 380-412, November.
    6. Chui, Michael, et al, 2002. " North-South Models of Growth and Trade," Journal of Economic Surveys, Wiley Blackwell, vol. 16(2), pages 123-65, April.
    7. van Marrewijk, Charles & Verbeek, Jos, 1993. "Disequilibrium Growth Theory in an International Perspective," Oxford Economic Papers, Oxford University Press, vol. 45(2), pages 311-31, April.
    8. Sarkar, Prabirjit, 2001. "Technical Progress and the North-South Terms of Trade," Review of Development Economics, Wiley Blackwell, vol. 5(3), pages 433-43, October.
    9. Mazumdar, Joy, 1996. "Do Static Gains from Trade Lead to Medium-Run Growth?," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1328-37, December.
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