IDEAS home Printed from https://ideas.repec.org/a/mes/postke/v31y2008i2p299-324.html
   My bibliography  Save this article

North-South Ricardian trade and growth under the balance-of-payments constraint

Author

Listed:
  • Hiroaki Sasaki

Abstract

This paper analyzes the growth rates of two countries and the bilateral income disparity in relation to North-South trade mainly from the viewpoint of the South. We extend a Ricardian trade model with a continuum of goods in order to consider a situation where the South faces the balance-of-payments constraint while the North is in full employment. Using the model, we show that depending on the size of a technological parameter, two possibilities arise with regard to the growth of the South: (1) the South can catch up with the North in income level by expanding its comparative advantage sectors, and (2) the South, in contrast, fails to catch up with the North in spite of expanding its comparative advantage sectors. Moreover, we show that if the South is in the catching-up process, a policy intended to improve its international price competitiveness exerts a positive effect on its growth, thereby promoting the catching-up process, whereas if the South is in the falling-behind process, such a policy exerts a negative effect on its growth, thereby leading to immiserizing growth.

Suggested Citation

  • Hiroaki Sasaki, 2008. "North-South Ricardian trade and growth under the balance-of-payments constraint," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 31(2), pages 299-324, December.
    • Handle: RePEc:mes:postke:v:31:y:2008:i:2:p:299-324
    as

    Download full text from publisher

    File URL: http://mesharpe.metapress.com/link.asp?target=contribution&id=5V2111T8647L8458
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hiroaki Sasaki, 2021. "Thirlwall’s law, uneven development, and income distribution," Metroeconomica, Wiley Blackwell, vol. 72(3), pages 592-611, July.
    2. Anthony Philip Thirlwall, 2012. "Balance of Payments Constrained Growth Models: History and Overview," Palgrave Macmillan Books, in: Elias Soukiazis & Pedro A. Cerqueira (ed.), Models of Balance of Payments Constrained Growth, chapter 1, pages 11-49, Palgrave Macmillan.
    3. Hideo Sato, 2021. "A two‐country, three‐commodity Ricardian trade model with Keynesian unemployment," Metroeconomica, Wiley Blackwell, vol. 72(2), pages 286-308, May.
    4. Sasaki, Hiroaki, 2019. "North-South Uneven Development and Income Distribution under the Balance of Payments Constraint," MPRA Paper 91469, University Library of Munich, Germany.
    5. Stefano Lucarelli & Daniela Palma & Roberto Romano, 2013. "Quando gli investimenti rappresentano un vincolo. Contributo alla discussione sulla crisi italiana nella crisi internazionale," Moneta e Credito, Economia civile, vol. 66(262), pages 167-203.
    6. A. P. Thirlwall, 2013. "Economic Growth in an Open Developing Economy," Books, Edward Elgar Publishing, number 15208.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mes:postke:v:31:y:2008:i:2:p:299-324. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MPKE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.