Economic Development under Alternative Trade Regimes

Rui Castro

Cahiers de recherche from Universite de Montreal, Departement de sciences economiques

Abstract: How does openness affect economic development? This question is answered in the context of a dynamic general equilibrium model of the world economy, where countries have technological differences that are both sector-neutral and specific to the investment goods sector. Relative to a benchmark case of trade in credit markets only, consider (i) a complete restriction of trade, and (ii) a full liberalization of trade. The first change decreases the cross-sectional dispersion of incomes only slightly, and produces a relatively small welfare loss. The second change, instead, decreases dispersion by a significant amount, and produces a very large welfare gain.

Keywords: Economic Develoent; International Trade; Investment-Scific Technology; Quantitative Dynamic General Equilibrium; Incomete Markets. (search for similar items in EconPapers)
JEL-codes: E13 F43 O11 O30 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2005
New Economics Papers: this item is included in nep-dev, nep-dge and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/1866/531 (application/pdf)

Related works:
Journal Article: ECONOMIC DEVELOPMENT UNDER ALTERNATIVE TRADE REGIMES (2006)
Working Paper: Economic Development under Alternative Trade Regimes (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:mtl:montde:2005-02

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