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International trade and the sectoral composition of production

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Author Info
E. Cristina Echevarria (University of Saskatchewan)

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Abstract

The main purpose of this study is to explore the interrelations between global economic growth and the changing composition of global trade. I define a global unbalanced growth path as a situation in which there exists a global constant return to capital. I use this definition to explore two claims regarding the sectoral composition of trade between primaries and non-primaries. First, in the long run, the comparative advantage in one good or the other is driven by the TFP differential in both sectors, which explains the fact that less developed countries tend to export primaries even though primaries are not less capital intensive. Second, non-homothetic preferences imply that, as the global economy develops, fewer and fewer countries export only or mostly primaries. (Copyright: Elsevier)

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File URL: http://dx.doi.org/10.1016/j.red.2007.06.004
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Article provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.

Volume (Year): 11 (2008)
Issue (Month): 1 (January)
Pages: 192-206
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Handle: RePEc:red:issued:06-126

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Related research
Keywords: Sectoral composition International trade Economic growth

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Find related papers by JEL classification:
F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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  1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October. [Downloadable!] (restricted)
  2. Cristina Echevarria, 1998. "A Three-Factor Agricultural Production Function: The Case Of Canada," International Economic Journal, Korean International Economic Association, vol. 12(3), pages 63-75, October. [Downloadable!] (restricted)
    Other versions:
  3. Kuznets, Simon, 1973. "Modern Economic Growth: Findings and Reflections," American Economic Review, American Economic Association, vol. 63(3), pages 247-58, June. [Downloadable!] (restricted)
  4. Cristina Echevarria, 1995. "Agricultural Development vs. Industrialization: Effects of Trade," Canadian Journal of Economics, Canadian Economics Association, vol. 28(3), pages 631-47, August. [Downloadable!] (restricted)
  5. Piyabha Kongsamut & Danyang Xie & Sergio Rebelo, 2001. "Beyond Balanced Growth," IMF Working Papers 01/85, International Monetary Fund.
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  6. Cristina Echevarria, 2000. "Non-homothetic preferences and growth," Journal of International Trade & Economic Development, Taylor and Francis Journals, vol. 9(2), pages 151-171, June. [Downloadable!] (restricted)
  7. Echevarria, Cristina, 1997. "Changes in Sectoral Composition Associated with Economic Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(2), pages 431-52, May.
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