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Endogenous Technology Gap With North-South Trade

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  • Sang-chul Yoon

    (Dankook University)

Abstract

This paper examines a simple unbounded endogenous growth model of bounded trade-induced learning by doing to illustrate the long-run effects of North-South trade on economic growth. The concept of specialization in both innovative and imitative processes is incorporated into learning by doing model with North-South trade. In this model, international trade results in a dynamic feedback effect between Southern imitation and Norther innovation yielding a higher steady-state growth rate. In a wide-gap equilibrium, the effect of Southern imitation is greater that that of Northern innovation. However, the effect of Northern innovation is greater thatn that of Southern imitation under a narrow-gap equilibrium. The model reveals that North-South trade generates steady endogenous technology gap in the long run equilibrium.

Suggested Citation

  • Sang-chul Yoon, 2005. "Endogenous Technology Gap With North-South Trade," Korean Economic Review, Korean Economic Association, vol. 21, pages 255-276.
    • Handle: RePEc:kea:keappr:ker-20051231-21-2-06
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    More about this item

    Keywords

    North-South trade; Endogenous technology gap; trade-induced learning-by-doing; Northern innovation; Southern imitation;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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