An Elementary Proposition on Technical Progress and Non-traded Goods
We explore the e ect of technical progress on the endogenously determined range of non-traded goods by using a Ricardian model with continuum of goods. By de ning technical progress on the basis of proportional changes in the relative productivity across sectors, we show that the range of non-traded goods decreases if technical progress is unbiased or if it is biased toward the goods that a country has more comparative advantage.
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