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Industrialization, Economic Growth and International Trade


  • Kar-yiu Wong
  • Chong K. Yip


This paper analyzes the relationship between economic growth, industrialization, and international trade in a two-sector endogenous growth model. With learning-by-doing, the economy grows perpetually along a balanced growth path, with manufacturing's relative price declining continuously. Under trade, its pattern of trade and growth will be affected by external growth. If it remains diversified under trade, its growth can keep in pace with the rest of the world. If the growth rate of the rest of the world is higher than a certain limit, the economy cannot catch up and will eventually produce agriculture only. Copyright 1999 by Blackwell Publishing Ltd.
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  • Kar-yiu Wong & Chong K. Yip, 1998. "Industrialization, Economic Growth and International Trade," Discussion Papers in Economics at the University of Washington 0077, Department of Economics at the University of Washington.
  • Handle: RePEc:fth:washer:0077

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    References listed on IDEAS

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    2. Charles I. Jones, 1995. "Time Series Tests of Endogenous Growth Models," The Quarterly Journal of Economics, Oxford University Press, vol. 110(2), pages 495-525.
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    4. Cohen, Wesley M. & Levin, Richard C., 1989. "Empirical studies of innovation and market structure," Handbook of Industrial Organization,in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 18, pages 1059-1107 Elsevier.
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    7. Nickell, Stephen J, 1996. "Competition and Corporate Performance," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 724-746, August.
    8. Segerstrom, Paul S, 1998. "Endogenous Growth without Scale Effects," American Economic Review, American Economic Association, vol. 88(5), pages 1290-1310, December.
    9. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-784, August.
    10. Lai, Edwin L. -C., 1998. "International intellectual property rights protection and the rate of product innovation," Journal of Development Economics, Elsevier, vol. 55(1), pages 133-153, February.
    11. Kortum, Samuel, 1993. "Equilibrium R&D and the Patent-R&D Ratio: U.S. Evidence," American Economic Review, American Economic Association, vol. 83(2), pages 450-457, May.
    12. Nickell, Stephen & Nicolitsas, Daphne & Dryden, Neil, 1997. "What makes firms perform well?," European Economic Review, Elsevier, vol. 41(3-5), pages 783-796, April.
    13. Philippe Aghion & Peter Howitt, 1997. "Endogenous Growth Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011662, January.
    14. Aghion, Philippe & Harris, Christopher & Vickers, John, 1997. "Competition and growth with step-by-step innovation: An example," European Economic Review, Elsevier, vol. 41(3-5), pages 771-782, April.
    15. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    Cited by:

    1. Hiroaki Sasaki, 2013. "Positive and Negative Population Growth and Long-Run Trade Patterns: A Non-Scale Growth Model," Discussion papers e-13-004, Graduate School of Economics Project Center, Kyoto University.
    2. Christiaans, Thomas, 2008. "International trade and industrialization in a non-scale model of economic growth," Structural Change and Economic Dynamics, Elsevier, vol. 19(3), pages 221-236, September.
    3. Keita Kamei & Hiroaki Sasaki, 2016. "Agricultural Productivity, Infrastructures and the Optimal Timing of Opening Trade," Manchester School, University of Manchester, vol. 84(5), pages 621-641, September.
    4. repec:eee:streco:v:41:y:2017:i:c:p:1-12 is not listed on IDEAS
    5. Kamei, Keita & Sasaki, Hiroaki, 2014. "Is Agricultural Productivity Growth Good for Industrialization? Infrastructures and the Welfare Maximizing Tax Rate," MPRA Paper 53606, University Library of Munich, Germany.

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