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Sustainable effects of technological progress and trade liberalization

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  • Shachmurove, Yochanan
  • Spiegel, Uriel

Abstract

This paper examines the controversy involving international trade by employing a simple model. It analyzes the effects of unilateral technological improvements in one entity on the welfare of that entity and its trading partners. Improvements in one country are irreversible and lead to substantial welfare effects on its trading partner. The result reveals some unpleasant free trade arithmetic. However, the results do not suggest that the trade should be curtailed. Rather, the paper advocates a critical need to allocate additional resources in order to maintain their competitive edge in an era when economies are becoming increasingly integrated.

Suggested Citation

  • Shachmurove, Yochanan & Spiegel, Uriel, 2013. "Sustainable effects of technological progress and trade liberalization," Economic Modelling, Elsevier, vol. 33(C), pages 956-964.
    • Handle: RePEc:eee:ecmode:v:33:y:2013:i:c:p:956-964
    DOI: 10.1016/j.econmod.2013.06.014
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    Cited by:

    1. Soo, Kwok Tong, 2017. "Indivisibilities in the Ricardian model of trade," Economic Modelling, Elsevier, vol. 63(C), pages 311-317.

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    More about this item

    Keywords

    International trade; Samuelson; Gainers and losers from trade; Technological improvements; Concealed technological improvements; Pareto improvements in production and consumption; Nash bargaining process; Sleeping patents; Rest of the world; Terms of trade; Distributive justice; China; United States;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General
    • F1 - International Economics - - Trade
    • O - Economic Development, Innovation, Technological Change, and Growth
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

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