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On Endogenous Product Cycles under Costly Trade

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  • Cristobal Campoamor, Adolfo

Abstract

The catchup and convergence of developing economies with the Western world is a major experience in modern history. In this paper we explore the role played jointly by technological imitation and trade liberalization in a North-South endogenous growth model. We prove that a gradual trade liberalization between South and North will promote convergence at any level of initial trade costs if the Southern economies are fully industrialized, their R&D potential is relatively low and the elasticity of substitution among manufactures is high enough.

Suggested Citation

  • Cristobal Campoamor, Adolfo, 2015. "On Endogenous Product Cycles under Costly Trade," MPRA Paper 67289, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:67289
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    References listed on IDEAS

    as
    1. Adolfo Cristobal-Campoamor, 2009. "International convergence and local divergence," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 43(2), pages 527-558, June.
    2. Mondal, Debasis, 2008. "Stability analysis of the Grossman-Helpman model of endogenous product cycles," Journal of Macroeconomics, Elsevier, vol. 30(3), pages 1302-1322, September.
    3. Grossman, Gene M & Helpman, Elhanan, 1991. "Endogenous Product Cycles," Economic Journal, Royal Economic Society, vol. 101(408), pages 1214-1229, September.
    4. Krugman, Paul, 1979. "A Model of Innovation, Technology Transfer, and the World Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 253-266, April.
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    6. Segerstrom, Paul & Dinopoulos, Elias, 2006. "North-South Trade and Economic Growth," CEPR Discussion Papers 5887, C.E.P.R. Discussion Papers.
    7. Edwin L.-C. Lai, 2008. "The international product cycle and globalization of production," Staff Papers, Federal Reserve Bank of Dallas, issue May.
    8. Gustafsson, Peter & Segerstrom, Paul, 2010. "North-South trade with increasing product variety," Journal of Development Economics, Elsevier, vol. 92(2), pages 97-106, July.
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    More about this item

    Keywords

    Product Cycles; Convergence; Trade Openness; Endogenous Growth;
    All these keywords.

    JEL classification:

    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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