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Winners and losers in a North-South model of growth, innovation and product cycles

  • Chui, Michael
  • Levine, Paul
  • Pearlman, Joseph

The paper examines the welfare gains from North-South trade and their distribution. We construct an endogenous growth North-South model with four Southern stages of development as possible equilibria: specialisation in a traditional good; the South in addition copies Northern high-tech manufactured goods; the South begins to innovate in its own right and finally a stage in which the South only innovates, as in the North. We use this model to show that dynamic gains from trade and from Southern development through the stages can create new winners, unskilled workers in the North and possibly skilled workers in the South.

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Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 65 (2001)
Issue (Month): 2 (August)
Pages: 333-365

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Handle: RePEc:eee:deveco:v:65:y:2001:i:2:p:333-365
Contact details of provider: Web page: http://www.elsevier.com/locate/devec

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  1. Gene M. Grossman & Elhanan Helpman, 1989. "Endogenous Product Cycles," NBER Working Papers 2913, National Bureau of Economic Research, Inc.
  2. van de Klundert, Theo & Smulders, Sjak, 1996. "North-South knowledge spillovers and competition: convergence versus divergence," Journal of Development Economics, Elsevier, vol. 50(2), pages 213-232, August.
  3. Feenstra, Robert C., 1996. "Trade and uneven growth," Journal of Development Economics, Elsevier, vol. 49(1), pages 229-256, April.
  4. Elhanan Helpman, 1992. "Innovation, Imitation, and Intellectual Property Rights," NBER Working Papers 4081, National Bureau of Economic Research, Inc.
  5. Segerstrom, P.S., 1990. "Innovation, Imitation And Economic Growth," Papers 8818, Michigan State - Econometrics and Economic Theory.
  6. Wood, Adrian, 1995. "North-South Trade, Employment and Inequality: Changing Fortunes in a Skill-Driven World," OUP Catalogue, Oxford University Press, number 9780198290155, March.
  7. Robert J. Barro & Xavier Sala-i-Martin, 1995. "Technological diffusion, convergence and growth," Economics Working Papers 116, Department of Economics and Business, Universitat Pompeu Fabra.
  8. Daron Acemoglu & Fabrizio Zilbotti, 1999. "Productivity Differences," NBER Working Papers 6879, National Bureau of Economic Research, Inc.
  9. Grossman, Gene M & Helpman, Elhanan, 1990. "Comparative Advantage and Long-run Growth," American Economic Review, American Economic Association, vol. 80(4), pages 796-815, September.
  10. H.W. Arndt, 1998. "Globalisation," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 51(204), pages 73-89.
  11. Lai, Edwin L. -C., 1998. "International intellectual property rights protection and the rate of product innovation," Journal of Development Economics, Elsevier, vol. 55(1), pages 133-153, February.
  12. Edwards, Sebastian, 1993. "Openness, Trade Liberalization, and Growth in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1358-93, September.
  13. van Elkan, Rachel, 1996. "Catching up and slowing down: Learning and growth patterns in an open economy," Journal of International Economics, Elsevier, vol. 41(1-2), pages 95-111, August.
  14. Grossman, G.M. & Helpman, E., 1989. "Quality Ladders And Product Cycles," Papers 39-89, Tel Aviv.
  15. Leamer, Edward E, 1987. "Paths of Development in the Three-Factor, n-Good General Equilibrium Model," Journal of Political Economy, University of Chicago Press, vol. 95(5), pages 961-99, October.
  16. Martin L. Weitzman, 1998. "Recombinant Growth," The Quarterly Journal of Economics, MIT Press, vol. 113(2), pages 331-360, May.
  17. David Currie & Paul Levine & Joeseph Pearlman & Michael Chui, 1996. "Phases of Imitation and Innovation in a North-South Endogenous Growth Model," School of Economics Discussion Papers 9602, School of Economics, University of Surrey.
  18. H.W. Arndt, 1998. "Globalisation," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 51(204), pages 73-89.
  19. Chui, Michael & Levine, Paul & Pearlman, Joseph, 2001. "Winners and losers in a North-South model of growth, innovation and product cycles," Journal of Development Economics, Elsevier, vol. 65(2), pages 333-365, August.
  20. Arnold, Lutz G., 2002. "On the growth effects of North-South trade: the role of labor market flexibility," Journal of International Economics, Elsevier, vol. 58(2), pages 451-466, December.
  21. Krugman, Paul, 1979. "A Model of Innovation, Technology Transfer, and the World Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 253-66, April.
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