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The Elixir of Growth: Trade, Non-Traded Goods and Development

Author

Listed:
  • Minford, Patrick
  • Nowell, Eric
  • Riley, Jonathan

Abstract

Development and convergence is explained as the transfer of technology embodied in machinery, to the manufacturing sector of those developing countries that institute the necessary property rights. The process is modelled within a Heckscher-Ohlin-Samuelson framework with capital mobility and endogenous supplies of immobile factors, skilled and unskilled labour and land. The model suggests a factor-price-based PPP method of measuring developing countries' GDP. Model simulations of the assumed technical transfer to developing countries imply falling wages and employment of unskilled labour in developed countries, combined with improvements in their terms of trade - shared gains from trade combined with a distributional bias.

Suggested Citation

  • Minford, Patrick & Nowell, Eric & Riley, Jonathan, 1995. "The Elixir of Growth: Trade, Non-Traded Goods and Development," CEPR Discussion Papers 1165, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:1165
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    Citations

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    Cited by:

    1. Olivier Bontout & Sébastien Jean, 1998. "Sensibilité des salaires relatifs aux chocs exogènes de commerce international et de progrès technique: une évaluation d'équilibre général," Working Papers 1998-09, CEPII research center.
    2. Minford Patrick, 1996. "Free Trade And Long Wages – Still In The General Interest," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 7(1), pages 123-130, March.
    3. Farahane, Matias Jaime & Heshmati, Almas, 2020. "Trade and Economic Growth: Theories and Evidence from the Southern African Development Community," IZA Discussion Papers 13679, Institute of Labor Economics (IZA).
    4. Gundlach, Erich & Nunnenkamp, Peter, 1997. "Labor markets in the global economy: How to prevent rising wage gaps and unemployment," Kiel Discussion Papers 305, Kiel Institute for the World Economy (IfW Kiel).
    5. Abel M. Mateus, 1996. "Panel Discussion: implications of growth theory for macro-policy: what have we learned?," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 40(Jun), pages 286-297.

    More about this item

    Keywords

    Development; Technological Transfer; Unemployment; Unskilled Labour; Wage Dispersion;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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