A two-country dynamic model of international trade and endogenous growth: multiple balanced growth paths and stability
We formulate a two-country endogenous growth model which explain joint determination of long-run trade patterns and world growth rates. After providing the existence and local stability of the continuum of balanced growth paths, we show that main standard trade propositions hold under some modifications and that, subject to certain conditions concerning social and private rankings of factory intensities between production sectors, the higher is the growth rate, the smaller is the volume of international trade among balanced growth paths in the continuum.
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- Nishimura, Kazuo & Shimomura, Koji, 2002.
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"Indeterminancy and Sunspots with Constant Returns,"
96-44, C.V. Starr Center for Applied Economics, New York University.
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"Factor Accumulation and Trade: Dynamic Comparative Advantage with Endogenous Physical and Human Capital,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(3), pages 1041-1060, 08.
- Benhabib, J. & Meng, Q. & Nishimura, K., 1999.
"Indeterminacy Under Constant Returns to Scale in Multisector Economies,"
99-17, C.V. Starr Center for Applied Economics, New York University.
- Jess Benhabib & Qinglai Meng & Kazuo Nishimura, 2000. "Indeterminacy under Constant Returns to Scale in Multisector Economies," Econometrica, Econometric Society, vol. 68(6), pages 1541-1548, November.
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