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International Trade Arising from Wage Differences

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  • Sikander Rahim

    () (Former World Bank official.)

Abstract

This paper analyzes how trade can develop between low and high wage countries when there is free trade and when there is protection. In particular, the paper focuses on Pakistani industrial development from the 1950’s and how standard international trade theory relies on specific assumptions about the nature of capital, which may not hold. This, in turn, has specific implications for industrial policy in low wage countries.

Suggested Citation

  • Sikander Rahim, 2009. "International Trade Arising from Wage Differences," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 14(Special E), pages 135-154, September.
  • Handle: RePEc:lje:journl:v:14:y:2009:i:sp:p:135-154
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    More about this item

    Keywords

    International trade; investment; comparative advantage;

    JEL classification:

    • F19 - International Economics - - Trade - - - Other
    • J00 - Labor and Demographic Economics - - General - - - General
    • J39 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Other

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