TY - JOUR
T1 - A Ricardian model of trade and growth with endogenous trade status
AU - Naito, Takumi
N1 - Funding Information:
I am grateful to the co-editor Timothy J. Kehoe, two anonymous referees, and conference and seminar participants at IEFS Japan Meeting 2010, Tohoku University, Doshisha University, Waseda University, Osaka University, and Kansai Macroeconomics Workshop for their helpful comments and suggestions. I also appreciate IR/PS, UCSD for great research environment, and JSPS Postdoctoral Fellowship for Research Abroad and KAKENHI # 22730190 for financial support. All remaining errors are mine.
Copyright:
Copyright 2012 Elsevier B.V., All rights reserved.
PY - 2012/5
Y1 - 2012/5
N2 - We formulate a two-country, continuum-good Ricardian model of trade and endogenous growth with endogenous trade status. After establishing the existence, uniqueness, and global stability of a balanced growth path, we show that, compared with the old balanced growth path, a permanent fall in the trade cost in any one country: (i) raises the growth rates of capital in all countries for all periods; (ii) increases both the range of the imported varieties and that of the exported varieties in all countries for all periods; and (iii) raises welfare in all countries. Our theoretical predictions are qualitatively consistent with the empirical evidence.
AB - We formulate a two-country, continuum-good Ricardian model of trade and endogenous growth with endogenous trade status. After establishing the existence, uniqueness, and global stability of a balanced growth path, we show that, compared with the old balanced growth path, a permanent fall in the trade cost in any one country: (i) raises the growth rates of capital in all countries for all periods; (ii) increases both the range of the imported varieties and that of the exported varieties in all countries for all periods; and (iii) raises welfare in all countries. Our theoretical predictions are qualitatively consistent with the empirical evidence.
KW - Endogenous growth
KW - Endogenous trade status
KW - Ricardian model
KW - Terms of trade
KW - Unilateral trade liberalization
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U2 - 10.1016/j.jinteco.2011.11.007
DO - 10.1016/j.jinteco.2011.11.007
M3 - Article
AN - SCOPUS:84860273228
SN - 0022-1996
VL - 87
SP - 80
EP - 88
JO - Journal of International Economics
JF - Journal of International Economics
IS - 1
ER -