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Trade Patterns and Non-Scale Growth between Two Countries

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  • Hiroaki Sasaki

Abstract

This paper builds a two-country, two-sector (manufacturing and agriculture), non-scale growth model and investigates the relationship between trade patterns and the growth rate of per capita real consumption. If the population growth rate of the home country is higher than that of the foreign country, the following results are obtained. (1) Under autarky, the growth rate of per capita real consumption is higher in the home country than in the foreign country. (2) Under free trade, if the home country completely specializes in manufacturing and the foreign country asymptotically completely specializes in agriculture, then the growth rate of the foreign country is higher than that of the home country, though this trade pattern is not sustainable in the long run. (3) Under free trade, if the home country produces both goods and the foreign country asymptotically completely specializes in agriculture, then the growth rates of the home country and the foreign country are equal, and this trade pattern is sustainable in the long run.

Suggested Citation

  • Hiroaki Sasaki, 2012. "Trade Patterns and Non-Scale Growth between Two Countries," Discussion papers e-12-006, Graduate School of Economics Project Center, Kyoto University.
    • Handle: RePEc:kue:dpaper:e-12-006
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    File URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-12-006.pdf
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    References listed on IDEAS

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    Cited by:

    1. Sasaki, Hiroaki, 2015. "International Trade And Industrialization With Negative Population Growth," Macroeconomic Dynamics, Cambridge University Press, vol. 19(8), pages 1647-1658, December.

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    More about this item

    Keywords

    non-scale growth model; trade patterns; population growth; per capita growth;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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