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International trade and the sectoral composition of production

  • E. Cristina Echevarria

    (University of Saskatchewan)

The main purpose of this study is to explore the interrelations between global economic growth and the changing composition of global trade. I define a global unbalanced growth path as a situation in which there exists a global constant return to capital. I use this definition to explore two claims regarding the sectoral composition of trade between primaries and non-primaries. First, in the long run, the comparative advantage in one good or the other is driven by the TFP differential in both sectors, which explains the fact that less developed countries tend to export primaries even though primaries are not less capital intensive. Second, non-homothetic preferences imply that, as the global economy develops, fewer and fewer countries export only or mostly primaries. (Copyright: Elsevier)

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File URL: http://dx.doi.org/10.1016/j.red.2007.06.004
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Article provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.

Volume (Year): 11 (2008)
Issue (Month): 1 (January)
Pages: 192-206

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Handle: RePEc:red:issued:06-126
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  1. Kongsamut, P. & Rebelo, S. & Xie, D., 1997. "Beyong Balanced Growth," RCER Working Papers 438, University of Rochester - Center for Economic Research (RCER).
  2. Laitner, John, 2000. "Structural Change and Economic Growth," Review of Economic Studies, Wiley Blackwell, vol. 67(3), pages 545-61, July.
  3. Cristina Echevarria, 1997. "A three-factor agricultural production function: The case of Canada," Working Papers. Serie AD 1997-12, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  4. Edwards, Sebastian, 1992. "Trade orientation, distortions and growth in developing countries," Journal of Development Economics, Elsevier, vol. 39(1), pages 31-57, July.
  5. Jeremy Greenwood & Gokce Uysal, 2003. "New Goods and the Transition to a New Economy," Economie d'Avant Garde Research Reports 5, Economie d'Avant Garde.
  6. Kuznets, Simon, 1971. "Modern Economic Growth: Findings and Reflections," Nobel Prize in Economics documents 1971-2, Nobel Prize Committee.
  7. Cristina Echevarria, 1995. "Agricultural Development vs. Industrialization: Effects of Trade," Canadian Journal of Economics, Canadian Economics Association, vol. 28(3), pages 631-47, August.
  8. Echevarria, Cristina, 1997. "Changes in Sectoral Composition Associated with Economic Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(2), pages 431-52, May.
  9. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
  10. Cristina Echevarria, 2001. "Non-homothetic preferences and growth," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 9(2), pages 151-171.
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