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Comparative Advantage and Long-Run Growth


  • Gene M. Grossman
  • Elhanan Helpman


We construct a dynamic, two-country model of trade and growth in which endogenous technological progress results from the profit-maximizing behavior of entrepreneurs. We study the role that the external trading environment and that trade and industrial policies play in the determination of long-run growth rates. We find that cross-country differences in efficiency at R&D versus manufacturing (i.e. comparative advantage) bear importantly on the growth effects of economic structure and commercial policies. Our analysis allows for both natural and acquired comparative advantage, and we discuss the primitive determinants of the latter.

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  • Gene M. Grossman & Elhanan Helpman, 1989. "Comparative Advantage and Long-Run Growth," NBER Working Papers 2809, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:2809
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    1. Axel Borsch-Supan & Laurence J. Kotlikoff & John N. Morris, 1988. "The Dynamics of Living Arrangements of the Elderly," NBER Working Papers 2787, National Bureau of Economic Research, Inc.
    2. David T. Ellwood & Thomas J. Kane, 1989. "The American Way of Aging: An Event History Analysis," NBER Working Papers 2892, National Bureau of Economic Research, Inc.
    3. Alan M. Garber & Thomas E. MaCurdy, 1989. "Predicting Nursing Home Utilization Among the High-Risk Elderly," NBER Working Papers 2843, National Bureau of Economic Research, Inc.
    4. Jonathan Feinstein & Daniel McFadden, 1989. "The Dynamics of Housing Demand by the Elderly: Wealth, Cash Flow, and Demographic Effects," NBER Chapters,in: The Economics of Aging, pages 55-92 National Bureau of Economic Research, Inc.
    5. Laurence J. Kotlikoff & John N. Morris, 1990. "Why Don't the Elderly Live with Their Children? A New Look," NBER Chapters,in: Issues in the Economics of Aging, pages 149-172 National Bureau of Economic Research, Inc.
    6. Gary Chamberlain, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 225-238.
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