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On Behavioral Macroeconomics, Globalization, and Economic Growth

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  • Rosas-Martinez, Victor H.

Abstract

We assess theoretically the effect of forming a free trade union on the total production of a nation, where such effects are caused by the absorption of technologies. A popular metaphor describes the people as crabs in a bucket because when one crab tries to scape, the others pull it down avoiding a possible way out for all of them. Given this knowledge, posteriorly and independently of the income inequality levels, we extend our analyses to consider the effect of envy in a macroeconomic level on the total production, and draw the implications which this phenomenon has on the formation of free trade unions. We make strategic policy recommendations to allow the achievement of a globalization that benefits each member nation, where we show that the great trade union might have to start with gradual and charitable subregional agreements.

Suggested Citation

  • Rosas-Martinez, Victor H., 2015. "On Behavioral Macroeconomics, Globalization, and Economic Growth," MPRA Paper 70751, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:70751
    as

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    File URL: https://mpra.ub.uni-muenchen.de/70751/1/MPRA_paper_70751.pdf
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    References listed on IDEAS

    as
    1. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    2. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 70(1), pages 65-94.
    3. Jakob B. Madsen, 2009. "Trade Barriers, Openness, and Economic Growth," Southern Economic Journal, Southern Economic Association, vol. 76(2), pages 397-418, October.
    4. Vamvakidis, Athanasios, 1998. "Regional Integration and Economic Growth," World Bank Economic Review, World Bank Group, vol. 12(2), pages 251-270, May.
    5. Lal, Deepak & Rajapatirana, Sarath, 1987. "Foreign Trade Regimes and Economic Growth in Developing Countries," World Bank Research Observer, World Bank Group, vol. 2(2), pages 189-217, July.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    International Trade; Technological Absorption; Behavioral Macroeconomics; Economic Growth; Trade Policy;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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