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Can Productivity Progress In China Hurt The Usa? Samuelson'S Example Extended

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  • Wen-li Cheng
  • Ding-sheng Zhang

Abstract

This paper develops a general equilibrium three-goods Ricardian model that extends Samuelson's example on the impact of productivity progress. Our model highlights Samuelson's insight that productivity progress can change the pattern of trade and in turn can have dramatic welfare implications. It also shows that while Samuelson is correct that productivity growth in one country can hurt another, the loss is not as permanent as his example appears to suggest. Continuing productivity growth in one country is likely to benefit all trading countries in the long run. Copyright 2007 The Authors Journal compilation 2007 Blackwell Publishing Ltd

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  • Wen-li Cheng & Ding-sheng Zhang, 2007. "Can Productivity Progress In China Hurt The Usa? Samuelson'S Example Extended," Pacific Economic Review, Wiley Blackwell, vol. 12(1), pages 101-115, February.
  • Handle: RePEc:bla:pacecr:v:12:y:2007:i:1:p:101-115
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    Cited by:

    1. Cheng, Wenli & Zhang, Dingsheng, 2016. "How might the South be helped by Northern technology yet harmed by Northern money?," Economic Modelling, Elsevier, vol. 55(C), pages 83-91.
    2. Cheng, Wenli & Zhang, Dingsheng, 2012. "A monetary model of China–US trade relations," Economic Modelling, Elsevier, vol. 29(2), pages 233-238.

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