IDEAS home Printed from
   My bibliography  Save this paper

Why Might a Country Want to Develop its Comparative Disadvantage Industries?


  • Wenli Cheng
  • Dingsheng Zhang


This paper develops a general equilibrium 2x2 Ricardian model that demonstrates the possibility of immiserizing growth as a result of a productivity improvement in a country's export industry. The model also shows that immiserizing growth can be avoided by improving the productivity of the country's comparative disadvantage industry. However this strategy may inflict harm on its trading partner. In comparison, a balanced growth strategy can improve welfare of the growing country without hurting its trading partner.

Suggested Citation

  • Wenli Cheng & Dingsheng Zhang, 2005. "Why Might a Country Want to Develop its Comparative Disadvantage Industries?," Monash Economics Working Papers 15/05, Monash University, Department of Economics.
  • Handle: RePEc:mos:moswps:2005-15

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Jagdish N. Bhagwati, 1968. "Distortions and Immiserizing Growth: a Generalization," Review of Economic Studies, Oxford University Press, vol. 35(4), pages 481-485.
    2. Melvin, James R, 1969. "Demand Conditions and Immiserizing Growth," American Economic Review, American Economic Association, vol. 59(4), pages 604-606, Part I Se.
    3. Bhagwati, Jagdish N, 1969. "Optimal Policies and Immiserizing Growth," American Economic Review, American Economic Association, vol. 59(5), pages 967-970, December.
    Full references (including those not matched with items on IDEAS)

    More about this item


    2x2 Ricardian model; immiserizing growth; balanced growth;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mos:moswps:2005-15. 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: (Simon Angus). General contact details of provider: .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.