Factor endowment, impatience and trade patterns in a small open economy of endogenous growth
The prediction of trade patterns is usually based on physical factor abundance. In a context of endogenous growth, however, physical factor richness does not always predict trade patterns in a reliable way. In a world where countries differ only in their factor endowment trade patterns can easily be such that a physically capital rich country exports the labour intensive good. Further, if the consumers' time preference rates are allowed to vary between countries, they influence trade patterns, too, which then do not reflect physical factor abundance for fairly general conditions.
|Date of creation:||25 Mar 1994|
|Date of revision:||06 Apr 1994|
|Note:||19 pages, single spaced, 3 figures, PostScript, replacement (now 11 inches length, same contents)|
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