By extending the Rivera-Batiz–Romer lab-equipment model of growth with expanding input varieties to include both heterogeneous firms and asymmetric countries, we show that even unilateral trade liberalization always raises both countries’ long-run growth and welfare.
- Asymmetric countries
- Endogenous technological change
- Heterogeneous firms
- Lab-equipment model
- Unilateral trade liberalization
ASJC Scopus subject areas
- Economics and Econometrics