Trade Patterns and Non-Scale Growth between Two Countries
AbstractThis paper builds a two-country, two-sector (manufacturing and agriculture), non-scale growth model and investigates the relationship between trade patterns and the growth rate of per capita real consumption. If the population growth rate of the home country is higher than that of the foreign country, the following results are obtained. (1) Under autarky, the growth rate of per capita real consumption is higher in the home country than in the foreign country. (2) Under free trade, if the home country completely specializes in manufacturing and the foreign country asymptotically completely specializes in agriculture, then the growth rate of the foreign country is higher than that of the home country, though this trade pattern is not sustainable in the long run. (3) Under free trade, if the home country produces both goods and the foreign country asymptotically completely specializes in agriculture, then the growth rates of the home country and the foreign country are equal, and this trade pattern is sustainable in the long run.
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Bibliographic InfoPaper provided by Graduate School of Economics Project Center, Kyoto University in its series Discussion papers with number e-12-006.
Length: 26 pages
Date of creation: Aug 2012
Date of revision:
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More information through EDIRC
non-scale growth model; trade patterns; population growth; per capita growth;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
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