Trade Agreements, Bargaining and Economic Growth
Rebelo's two-sector endogenous growth model is embedded within a two-country international trade framework. The two countries bargain over a trade agreement that specifies: (i) the size of the foreign aid that the richer country gives to the poorer one; (ii) the terms of the international trade that takes place after the aid is given. Foreign aid is given not because of generosity, but because it improves the capital allocation across the world and thus raises total world production. This world production surplus enables the rich country to raise its equilibrium consumption and welfare beyond their no-aid levels. To ensure it, the rich country uses a trade agreement to condition the aid on favorable terms of trade.
|Date of creation:|
|Date of revision:|
|Publication status:||forthcoming in Journal of Macroeconomics|
|Contact details of provider:|| Postal: 199 Aba Khoushy Ave., Mount Carmel, Haifa, Israel, 3498838|
Web page: http://hevra.haifa.ac.il/econ/index.php/en/
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.:
- Sergio T. Rebelo, 1990.
"Long Run Policy Analysis and Long Run Growth,"
NBER Working Papers
3325, National Bureau of Economic Research, Inc.
- Ariel Rubinstein, 2010.
"Perfect Equilibrium in a Bargaining Model,"
Levine's Working Paper Archive
252, David K. Levine.
- Gabriel Felbermayr, 2004.
"Specialization on a technologically atagnant aector need not be bad for growth,"
Economics working papers
2004-02, Department of Economics, Johannes Kepler University Linz, Austria.
- Gabriel J. Felbermayr, 2007. "Specialization on a technologically stagnant sector need not be bad for growth," Oxford Economic Papers, Oxford University Press, vol. 59(4), pages 682-701, October.
- Felbermayr, Gabriel J., 2004. "Specialization on a Technologically Stagnant Sector Need Not Be Bad for Growth," Center for European, Governance and Economic Development Research Discussion Papers 24, University of Goettingen, Department of Economics.
- Felbermayr, Gabriel, 2007. "Specialization on a technologically stagnant sector need not be bad for growth," Munich Reprints in Economics 20645, University of Munich, Department of Economics.
- Robert Hunter Wade, 2003. "What strategies are viable for developing countries today? The World Trade Organization and the shrinking of ‘development space’," LSE Research Online Documents on Economics 28239, London School of Economics and Political Science, LSE Library.
- Suwa Eisenmann, Akiko & Verdier, Thierry, 2007.
"Aid and Trade,"
CEPR Discussion Papers
6465, C.E.P.R. Discussion Papers.
- John Kennan & Raymond Riezman, 2013.
"Do Big Countries Win Tariff Wars?,"
World Scientific Book Chapters,
in: International Trade Agreements and Political Economy, chapter 4, pages 45-51
World Scientific Publishing Co. Pte. Ltd..
- Alesina, Alberto & Dollar, David, 2000.
"Who Gives Foreign Aid to Whom and Why?,"
Journal of Economic Growth,
Springer, vol. 5(1), pages 33-63, March.
- Dollar, David & Alesina, Alberto, 2000. "Who Gives Foreign Aid to Whom and Why?," Scholarly Articles 4553020, Harvard University Department of Economics.
- Alberto Alesina & David Dollar, 1998. "Who Gives Foreign Aid to Whom and Why?," NBER Working Papers 6612, National Bureau of Economic Research, Inc.
- Daniel Cohen & Pierre Jacquet & Helmut Reisen, 2006. "After Gleneagles: What Role for Loans in ODA?," OECD Development Centre Policy Briefs 31, OECD Publishing.
- Jason G. Cummins & Giovanni L. Violante, 2002.
"Investment-Specific Technical Change in the US (1947-2000): Measurement and Macroeconomic Consequences,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 5(2), pages 243-284, April.
- Cummins, Jason G & Violante, Giovanni L, 2002. "Investment-Specific Technical Change in the US (1947-2000): Measurement and Macroeconomic Consequences," CEPR Discussion Papers 3584, C.E.P.R. Discussion Papers.
- Jason G. Cummins & Giovanni L. Violante, 2002. "Investment-specific technical change in the US (1947-2000): measurement and macroeconomics consequences," Finance and Economics Discussion Series 2002-10, Board of Governors of the Federal Reserve System (U.S.).
- Lahiri, Sajal & Raimondos-Moller, Pascalis & Wong, Kar-yiu & Woodland, Alan D., 2002. "Optimal foreign aid and tariffs," Journal of Development Economics, Elsevier, vol. 67(1), pages 79-99, February.
- Bulow, Jeremy & Rogoff, Kenneth S., 2005.
"Grants versus Loans for Development Banks,"
11129181, Harvard University Department of Economics.
- Frank Ackerman, . "05-01 "The Shrinking Gains from Trade: A Critical Assessment of Doha Round Projections"," GDAE Working Papers 05-01, GDAE, Tufts University.
- Devereux, Michael B, 1997.
"Growth, Specialization, and Trade Liberalization,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(3), pages 565-85, August.
- Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
- Mayer, Wolfgang, 1981. "Theoretical Considerations on Negotiated Tariff Adjustments," Oxford Economic Papers, Oxford University Press, vol. 33(1), pages 135-53, March.
- Chan, Kenneth S., 1988. "Trade negotiations in a Nash bargaining model," Journal of International Economics, Elsevier, vol. 25(3-4), pages 353-363, November.
When requesting a correction, please mention this item's handle: RePEc:haf:huedwp:wp201002. 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: (Anna Rubinchik)
If references are entirely missing, you can add them using this form.