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Dynamic Comparative Advantage and the Welfare Effects of Trade

Author

Listed:
  • Redding, S.

Abstract

This paper argues that developing economies may face a trade-off between specializaing according to existing comparative advantage (in low-technology goods), and entering sectors in which they currently lack a comparative advantage, but may acquire such an advantage in the future as a result of the potential for productivity growth (in high-technology goods). Comparative advantage is endogenously determined by past technological change, while simultaneously shaping current rates of innovation.

Suggested Citation

  • Redding, S., 1997. "Dynamic Comparative Advantage and the Welfare Effects of Trade," Economics Papers 140, Economics Group, Nuffield College, University of Oxford.
  • Handle: RePEc:nuf:econwp:140
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    References listed on IDEAS

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    More about this item

    Keywords

    ECONOMIC GROWTH ; LEARNING ; INTERNATIONAL TRADE ; PRODUCTIVITY;

    JEL classification:

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

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