Trade, Growth, and Technology Equalization
Trade is shown to increase economic growth purely through comparative advantage without recourse to scale effects, technology transfer, research and development, or even international investment. The resulting growth rates are those that would result from technology transfer, even though no technology transfer actually occurs. A balanced growth rate exists, is identical for all countries and therefore the world, and is asymptotically stable if and only if each country has an absolute (not just comparative) advantage in something. When balanced growth does not exist, trade reduces but does not eliminate differences between countries’ growth rates. Trade therefore does not necessarily guarantee a stable world income distribution. The magnitude of trade's effect on growth depends on the goods imported, not those exported.
|Date of creation:||Jun 2005|
|Date of revision:|
|Contact details of provider:|| Postal: Niels Bohrs Vej 9, 6700 Esbjerg|
Phone: +45 6550 2233
Fax: +45 6550 1090
Web page: http://degit.sam.sdu.dk/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- MacDonald, Glenn M & Markusen, James R, 1985. "A Rehabilitation of Absolute Advantage," Journal of Political Economy, University of Chicago Press, vol. 93(2), pages 277-97, April.
- Oded_Galor & Andrew Mountford, 2006.
"Trade and the Great Divergence: The Family Connection,"
2006-01, Brown University, Department of Economics.
- Oded Galor & Andrew Mountford, 2006. "Trade and the Great Divergence: The Family Connection," American Economic Review, American Economic Association, vol. 96(2), pages 299-303, May.
- Galor, Oded & Mountford, Andrew, 2006. "Trade and the Great Divergence: The Family Connection," CEPR Discussion Papers 5490, C.E.P.R. Discussion Papers.
- Grossman, G.M. & Helpman, E., 1988.
"Comparative Advantage And Long-Run Growth,"
39-88, Tel Aviv.
- Alcala, Francisco & Ciccone, Antonio, 2001.
"Trade and Productivity,"
CEPR Discussion Papers
3095, C.E.P.R. Discussion Papers.
- Francisco Alcalá & Antonio Ciccone, 2001. "Trade and productivity," Economics Working Papers 580, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2002.
- Francisco Alcalá & Antonio Ciccone, 2003. "Trade and Productivity," Working Papers 12, Barcelona Graduate School of Economics.
- Jones, Larry E & Manuelli, Rodolfo E, 1990. "A Convex Model of Equilibrium Growth: Theory and Policy Implications," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1008-38, October.
- Luis A. Rivera-Batiz & Paul M. Romer, 1991.
"Economic Integration and Endogenous Growth,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 106(2), pages 531-555.
- Francesco Caselli & Nicola Gennaioli, 2003.
NBER Working Papers
9442, National Bureau of Economic Research, Inc.
- Caselli, Francesco & Gennaioli, Nicola, 2003. "Dynastic Management," CEPR Discussion Papers 3767, C.E.P.R. Discussion Papers.
- Francesco Caselli & Nicola Gennaioli, 2006. "Dynastic Management," CEP Discussion Papers dp0741, Centre for Economic Performance, LSE.
- Francesco Caselli & Nicola Gennaioli, 2006. "Dynastic management," LSE Research Online Documents on Economics 3558, London School of Economics and Political Science, LSE Library.
- Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," NBER Working Papers 3577, National Bureau of Economic Research, Inc.
- Peter Howitt, 2000. "Endogenous Growth and Cross-Country Income Differences," American Economic Review, American Economic Association, vol. 90(4), pages 829-846, September.
- Ronald W. Jones, 2000. "Globalization and the Theory of Input Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 026210086x, March.
- Paul M Romer, 1999.
"Increasing Returns and Long-Run Growth,"
Levine's Working Paper Archive
2232, David K. Levine.
- Backus, David K. & Kehoe, Patrick J. & Kehoe, Timothy J., 1992.
"In search of scale effects in trade and growth,"
Journal of Economic Theory,
Elsevier, vol. 58(2), pages 377-409, December.
- Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 369-405.
- Peretto, P. & Smulders, J.A., 2002.
"Technological distance, growth and scale effects,"
Other publications TiSEM
bdce08a7-4ad9-4427-a99e-f, Tilburg University, School of Economics and Management.
When requesting a correction, please mention this item's handle: RePEc:deg:conpap:c010_008. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jan Pedersen)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.