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Title: Winners and Losers in a North-South Model of Growth, Innovation and Product Cycles

Author(s): Michael Chui, Paul L Levine and Joseph Pearlman

Publication Date: November 1999

Keyword(s): Distribution, Economic Growth and Gains from Trade

Programme Area(s): International Macroeconomics and International Trade and Regional Economics

Abstract: The paper examines the welfare gains from North-South trade and their distribution. We construct an endogenous growth North-South model with four Southern stages of development as possible equilibria: specialisation in a traditional good; the South in addition copies Northern high-tech manufactured goods; the South begins to innovate in its own right and finally a stage in which the South only innovates, as in the North. We use this model to show that dynamic gains from trade and from Southern development through the stages can create new winners, unskilled workers in the North and possibly skilled workers in the South.

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Bibliographic Reference

Chui, M, Levine, P and Pearlman, J. 1999. 'Winners and Losers in a North-South Model of Growth, Innovation and Product Cycles'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2291