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Dynamics of Trade Integration and Technological Convergence

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  • Robert Stehrer

Abstract

The issue of the impact of trade on economic performance and labour markets has been intensively discussed in recent literature on trade liberalization and globalization, where the debate was mainly about identifying the relative impact of trade and technology. The bulk of the existing literature in this area employs, almost without exception, a static Heckscher-Ohlin framework that seems not to be a suitable tool for analysing the ongoing dynamics. This paper presents a dynamic multi-sectoral framework with heterogenous labour to explore the issue of trade liberalization and sectoral catching-up in productivity levels. The model is basically an input-output framework with Schumpeterian features; the latter are modelled as the impact of transitory rents that result from uneven productivity growth and technological catching-up upon the price and quantity systems of the trading economies. Relative productivity and wage rate dynamics across sectors determine the comparative costs and the dynamics of trade specialization. In the Appendix, the equilibrium solutions of the model are derived.

Suggested Citation

  • Robert Stehrer, 2002. "Dynamics of Trade Integration and Technological Convergence," Economic Systems Research, Taylor & Francis Journals, vol. 14(3), pages 219-244.
    • Handle: RePEc:taf:ecsysr:v:14:y:2002:i:3:p:219-244
    DOI: 10.1080/0953531022000002486
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    References listed on IDEAS

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    1. Michael A. Landesmann & Robert Stehrer, 2000. "Industrial Specialization, Catching-up and Labour Market Dynamics," Metroeconomica, Wiley Blackwell, vol. 51(1), pages 67-101, February.
    2. Adrian Wood, 1997. "How Trade Hurt Unskilled Workers," Palgrave Macmillan Books, in: Jitendralal Borkakoti & Chris Milner (ed.), International Trade and Labour Markets, chapter 7, pages 140-168, Palgrave Macmillan.
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    6. Edward E. Leamer, 1994. "Trade, Wages and Revolving Door Ideas," NBER Working Papers 4716, National Bureau of Economic Research, Inc.
    7. J. S. L. McCombie & A. P. Thirlwall, 1994. "Economic Growth and the Balance-of-Payments Constraint," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-23121-8.
    8. Landesmann, Michael A. & Stehrer, Robert, 2001. "Convergence patterns and switchovers in comparative advantage," Structural Change and Economic Dynamics, Elsevier, vol. 12(4), pages 399-423, December.
    9. Goodwin, Richard M, 1986. "Swinging along the Turnpike with von Neumann and Sraffa," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 10(3), pages 203-210, September.
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    1. Michael A. Landesmann & Robert Stehrer, 2007. "Income Distribution, Technical Change And The Dynamics Of International Economic Integration," Metroeconomica, Wiley Blackwell, vol. 58(1), pages 45-73, February.
    2. Michael A. Landesmann, 2003. "Structural features of economic integration in an enlarged Europe: patterns of catching-up and industrial specialisation," European Economy - Economic Papers 2008 - 2015 181, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    3. Landesmann, M.A. & Stehrer, R., 2006. "Goodwin's structural economic dynamics: Modelling Schumpeterian and Keynesian insights," Structural Change and Economic Dynamics, Elsevier, vol. 17(4), pages 501-524, December.
    4. Robert Stehrer, 2005. "Employment, Education and Occupation Structures: A Framework for Forecasting," wiiw Research Reports 315, The Vienna Institute for International Economic Studies, wiiw.
    5. Sandu, Steliana & Paun, Cristian, 2010. "Assessing The Possibilities Of Filling The Gap Between Romania And The Eu In The Rdi Field," Working Papers of National Institute for Economic Research 100204, Institutul National de Cercetari Economice (INCE).

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