A Ricardian model of trade and growth with endogenous trade status

    Research output: Contribution to journalArticle

    8 Citations (Scopus)

    Abstract

    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.

    Original languageEnglish
    Pages (from-to)80-88
    Number of pages9
    JournalJournal of International Economics
    Volume87
    Issue number1
    DOIs
    Publication statusPublished - 2012 May

    Fingerprint

    Balanced growth path
    Trade and growth
    Ricardian model
    Trade costs
    Empirical evidence
    Uniqueness
    Prediction
    Endogenous growth
    Global stability

    Keywords

    • Endogenous growth
    • Endogenous trade status
    • Ricardian model
    • Terms of trade
    • Unilateral trade liberalization

    ASJC Scopus subject areas

    • Economics and Econometrics
    • Finance

    Cite this

    A Ricardian model of trade and growth with endogenous trade status. / Naito, Takumi.

    In: Journal of International Economics, Vol. 87, No. 1, 05.2012, p. 80-88.

    Research output: Contribution to journalArticle

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