Does international trade produce convergence?

In spite of increasing globalization around the world, the effects of international trade on economic growth are not very clear. I consider an endogenous economic growth model in an open economy with the Home Market Effect (HME) and non-homothetic preferences in order to identify some determinants o...

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Autor Principal: Giraldo, Lader
Formato: Documento de trabajo (Working Paper)
Lenguaje:Español (Spanish)
Publicado: Universidad del Rosario 2016
Materias:
F12
F43
O41
O33
Acceso en línea:http://repository.urosario.edu.co/handle/10336/12433
id ir-10336-12433
recordtype dspace
spelling ir-10336-124332019-09-19T12:37:01Z Does international trade produce convergence? Giraldo, Lader Comercio internacional Desarrollo económico Macroeconomía & temas relacionados Crecimientos económico Comercio exterior Economía de mercado Modelos econométricos International trade Economic growth Home market effect Non-homothetic preferences F12 F43 O41 O33 In spite of increasing globalization around the world, the effects of international trade on economic growth are not very clear. I consider an endogenous economic growth model in an open economy with the Home Market Effect (HME) and non-homothetic preferences in order to identify some determinants of the different results in this relationship. The model shows how trade between similar countries leads to convergence in economic growth when knowledge spillovers are present, while trade between very asymmetric countries produces divergence and may become trade in a poverty or growth trap. The results for welfare move in the same direction as economic growth since convergence implies increases in welfare for both countries, while divergence leads to increases in welfare for the largest country and the opposite for its commercial partner in the absence of knowledge spillovers. International trade does not implicate greater welfare as is usual in a static context under CES preferences. 2016-09-09 2016-10-20T13:46:22Z info:eu-repo/semantics/workingPaper info:eu-repo/semantics/publishedVersion http://repository.urosario.edu.co/handle/10336/12433 spa info:eu-repo/semantics/openAccess application/pdf Universidad del Rosario Facultad de Economía reponame:Repositorio Institucional EdocUR instname:Universidad del Rosario Acemoglu, D., Johnson, S., & Robinson, J. (2005). The Rise of Europe: Atlantic trade, institutional change and economic growth. American Economic Review, 546-579. Aghion, P., & Howitt, P. (2005). Growth with Quality-improving Innovations: An integrated framework. Handbook of Economic Growth. Baldwin, R., Martin, P., & Ottaviano, G. (2001). Global Income Divergence, Trade and Industrialization: The geography of growth take-offs. Journal of Economic Growth, 5-37. Barro, R., & Sala-i-Martin, X. (1992). Convergence. Journal of Political Economy, 223-251. Ben-David, D. (1993). Equalizing Exchange: Trade liberalization and income convergence. Quarterly Journal of Economics, 653-679. Chung, C. (2006). Nonhomothetic Preferences and the Home Market Effect: Does Relative Market Size Matter? Georgia Institute of Technology. Crozet, M., & Trionfetti, F. (2008). Trade costs and the Home Market Effect. Journal of International Economics, 309-321. Frankel, J. A., & Romer, D. (1999). Does Trade Cause Growth? The American Economic Review, 379-399. Giraldo Salazar, I., & Jaramillo, F. (2016). Productivity, Demand and the Home Market Effect. Serie documentos de trabajo Universidad del Rosario(186). Krugman, P. (1987). The Narrow Moving Band, the Dutch Disease, and the Competitive Consequences of Mrs. Tatcher. Journal of Development Economics, 41-55. Lucas, R. (1988). On the Mechanics of Economics Develpment. Journal of Monetary Economics, 3-42. Martin, P., & Ottaviano, G. (1999). Growing locations: Industry location in a model of endogenous growth. European Economic Review, 281-302. Melitz, M. J. (2005). When and How should Infant Industries be Protected? Journal of International Economics, 177-196. Thoenig, M., & Verdier, T. (2003). A Theory of Defensive Skill-Biased Innovation and Globalization. The American Economic Review, 709-728. Young, A. (1993). Substitution and Complementarity in Endogenous Innovation. The Quaterly Journal of Economics, 775-807.
institution EdocUR - Universidad del Rosario
collection DSpace
language Español (Spanish)
topic Comercio internacional
Desarrollo económico
Macroeconomía & temas relacionados
Crecimientos económico
Comercio exterior
Economía de mercado
Modelos econométricos
International trade
Economic growth
Home market effect
Non-homothetic preferences
F12
F43
O41
O33
spellingShingle Comercio internacional
Desarrollo económico
Macroeconomía & temas relacionados
Crecimientos económico
Comercio exterior
Economía de mercado
Modelos econométricos
International trade
Economic growth
Home market effect
Non-homothetic preferences
F12
F43
O41
O33
Giraldo, Lader
Does international trade produce convergence?
description In spite of increasing globalization around the world, the effects of international trade on economic growth are not very clear. I consider an endogenous economic growth model in an open economy with the Home Market Effect (HME) and non-homothetic preferences in order to identify some determinants of the different results in this relationship. The model shows how trade between similar countries leads to convergence in economic growth when knowledge spillovers are present, while trade between very asymmetric countries produces divergence and may become trade in a poverty or growth trap. The results for welfare move in the same direction as economic growth since convergence implies increases in welfare for both countries, while divergence leads to increases in welfare for the largest country and the opposite for its commercial partner in the absence of knowledge spillovers. International trade does not implicate greater welfare as is usual in a static context under CES preferences.
format Documento de trabajo (Working Paper)
author Giraldo, Lader
author_facet Giraldo, Lader
author_sort Giraldo, Lader
title Does international trade produce convergence?
title_short Does international trade produce convergence?
title_full Does international trade produce convergence?
title_fullStr Does international trade produce convergence?
title_full_unstemmed Does international trade produce convergence?
title_sort does international trade produce convergence?
publisher Universidad del Rosario
publishDate 2016
url http://repository.urosario.edu.co/handle/10336/12433
_version_ 1645141284284792832
score 12,111491