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Industrialization, Economic Growth, and International Trade

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  • Wong, Kar-yiu
  • Yip, Chong K

Abstract

This paper analyzes the relationship between economic growth, industrialization, and international trade in a two-sector endogenous growth model. With learning-by-doing, the economy grows perpetually along a balanced growth path, with manufacturing's relative price declining continuously. Under trade, its pattern of trade and growth will be affected by external growth. If it remains diversified under trade, its growth can keep in pace with the rest of the world. If the growth rate of the rest of the world is higher than a certain limit, the economy cannot catch up and will eventually produce agriculture only. Copyright 1999 by Blackwell Publishing Ltd.

Suggested Citation

  • Wong, Kar-yiu & Yip, Chong K, 1999. "Industrialization, Economic Growth, and International Trade," Review of International Economics, Wiley Blackwell, vol. 7(3), pages 522-540, August.
  • Handle: RePEc:bla:reviec:v:7:y:1999:i:3:p:522-40
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    Cited by:

    1. Hiroaki Sasaki, 2013. "Positive and Negative Population Growth and Long-Run Trade Patterns: A Non-Scale Growth Model," Discussion papers e-13-004, Graduate School of Economics Project Center, Kyoto University.
    2. Christiaans, Thomas, 2008. "International trade and industrialization in a non-scale model of economic growth," Structural Change and Economic Dynamics, Elsevier, vol. 19(3), pages 221-236, September.
    3. repec:eee:streco:v:41:y:2017:i:c:p:1-12 is not listed on IDEAS
    4. Kamei, Keita & Sasaki, Hiroaki, 2014. "Is Agricultural Productivity Growth Good for Industrialization? Infrastructures and the Welfare Maximizing Tax Rate," MPRA Paper 53606, University Library of Munich, Germany.

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