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Virtual Trade between Separated Time Zones and Growth

Author

Listed:
  • Sugata Marjit

    (Centre for Studies in Social Sciences, Calcutta)

  • Biswajit Mandal

    (Department of Economics & Politics, Visva-Bharati University Santiniketan, India)

Abstract

The purpose of this paper is to propose a model where trade has a direct and positive impact on growth rate of two trading nations beyond the level effect. We use the idea of virtual trade in intermediates induced by non- overlapping time zones and show how trade can increase the equilibrium optimal rate of growth. In this structure the trade impact goes beyond the level effect and directly causes growth. Typically standard models of trade cannot generate an automatic growth impact. Virtual trade may allow production to continue for 24x7 in separated time zones such as between US and India and that can lead to higher growth for both countries. Later we extend the model to incorporate accumulation of skill which becomes necessary for sustaining steady state growth.

Suggested Citation

  • Sugata Marjit & Biswajit Mandal, 2016. "Virtual Trade between Separated Time Zones and Growth," Discussion Papers Series 560, School of Economics, University of Queensland, Australia.
    • Handle: RePEc:qld:uq2004:560
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    File URL: https://economics.uq.edu.au/files/46140/560.pdf
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Sugata Marjit, 2020. "A New Ricardian Model of Trade, Growth and Inequality," CESifo Working Paper Series 8689, CESifo.
    2. Sugata Marjit, 2020. "A new Ricardian model of trade, growth and inequality- The role of financial capital," Discussion Papers 2020-28, University of Nottingham, GEP.
    3. Noritsugu Nakanishi & Ngo Van Long, 2020. "A new impetus for endogenous growth: R&D offshoring via virtual labor mobility," Review of International Economics, Wiley Blackwell, vol. 28(3), pages 846-883, August.
    4. Alaka Shree Prasad & Biswajit Mandal, 2019. "Time zone difference, skill formation and corrupt informal sector: the role of virtual trade," Indian Economic Review, Springer, vol. 54(2), pages 261-290, December.
    5. Mandal, Biswajit & Prasad, Alaka Shree, 2018. "Time Zone Differences, Communication Cost and Service Trade," MPRA Paper 87465, University Library of Munich, Germany.
    6. Mandal, Biswajit & Prasad, Alaka Shree & Bhattacharjee, Prasun, 2017. "A Review of Literature on Time Zone Difference and Trade," MPRA Paper 78779, University Library of Munich, Germany.
    7. Sugata Marjit & Lei Yang, 2020. "An Elementary Theorem on Gains from Virtual Trade," Working Papers 2046, Indian Institute of Foreign Trade.
    8. Prasad, Alaka Shree & Mandal, Biswajit, 2019. "Virtual trade between different time zones, educational capital and corrupt informal sector," MPRA Paper 96963, University Library of Munich, Germany.
    9. Marjit, Sugata & Yang, Lei, 2020. "An Elementary Theorem on Gains from Virtual Trade," MPRA Paper 104088, University Library of Munich, Germany.
    10. Biswajit Mandal & Sugata Marjit & Noritsugu Nakanishi, 2018. "Outsourcing, factor prices and skill formation in countries with non-overlapping time zones," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 8(2), pages 289-304, August.
    11. Sugata Marjit & Rashmi Ahuja & Abhilasha Pandey, 2021. "Education, Lack of Complementary Investment and Underemployment In an Open Economy," CESifo Working Paper Series 9278, CESifo.
    12. Biswajit Mandal & Alaka Shree Prasad, 2020. "A simple model of time zone differences, virtual trade and informality," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 14(1), pages 81-96, June.
    13. Sugata Marjit & Anwesha Basu & C. Veeramani, 2019. "Growth Gains from Trade," CESifo Working Paper Series 7905, CESifo.

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    More about this item

    Keywords

    International Trade; Time Zone; 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

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