The paper estimates an empirical relation based on Krugman’s “technological gap” model to explore the influence of the pattern of international trade and production on the overall productivity growth of a developing country. A key result is that increased import competition in medium-growth (but not in lowor highgrowth) manufacturing sectors enhances overall productivity growth. The authors als...

We analyze the relative growth performance of open economies in a two-country model where di¤erent endowments of labor and a natural resource generate asymmetric trade. A resource-rich economy trades resource-based intermediates for …nal manufacturing goods produced by a resource-poor economy. Productivity growth in both countries is driven by endogenous innovations. The e¤ects of a sudden incr...

We analyze recent contributions to growth theory based on the model of expanding variety of Romer (1990). In the first part, we present different versions of the benchmark linear model with imperfect competition. These include the “labequipment” model, “labor-for-intermediates” and “directed technical change”. We review applications of the expanding variety framework to the analysis of internat...

This paper builds a two-country (North, South), two-sector (polluting, nonpolluting) trade model with directed technical change, examining whether unilateral environmental policies can ensure sustainable growth. The polluting good is produced with a clean and a dirty input. A temporary Northern policy combining clean research subsidies and a trade tax can ensure sustainable growth but Northern ...

This paper builds a two-country, two-sector (polluting, nonpolluting) trade model with directed technical change, examining whether unilateral environmental policies can ensure sustainable growth. The polluting good generates more or less emissions depending on its relative use of a clean and a dirty input. I show that a unilateral policy combining clean research subsidies and a trade tax can e...

The development of pre-industrial Europe was driven by the expansion of trade. This paper describes the patterns of trade and shows how they can be understood in terms of differences in trading costs. It discusses how the different levels of trade–from local to transoceanic-contributed, both quantitatively and qualitatively, to the process of growth. JEL Categories: F14, F15, F43, N13, N73, O19...

This paper evaluates the impact of global external rebalancing on Developing Asia and the rest of the world using a multi-country multi-sector quantitative model of production and trade. Developing Asia countries currently running a trade surplus (such as People’s Republic of China or Malaysia) see a substantial rise in relative wages and an appreciation in the real exchange rate. They also see...

5 Using novel estimates of sectoral total factor productivities for 72 countries across 5 6 decades we provide evidence of relative productivity convergence: productivity grew 7 systematically faster in initially relatively less productive sectors. These changes have 8 had a significant impact on trade volumes and patterns, and a non-negligible welfare 9 impact. Had productivity in each country...

This paper studies the transitional dynamics in a quality ladder model of endogenous growth in which North-South trade leads to technological diffusion through reverse engineering of intermediate goods. The concept of learning-to-learn is incorporated into both imitative and innovative processes, which in turn drive domestic technological progress. International trade with imitation leads to fe...

We estimate productivities at the sector level for 72 countries and 5 decades, and examine how they evolve over time in both developed and developing countries. In both country groups, comparative advantage has become weaker: productivity grew systematically faster in sectors that were initially at greater comparative disadvantage. These changes have had a significant impact on trade volumes an...