Industrialisation and the Big Push in a Global Economy

Jens Wrona and Udo Kreickemeier

VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association

Abstract: Is it possible to escape from a poverty trap through international trade? To answer this question, we extend Murphy et al.’s (1989b) famous “Big Push” model towards a global economy. In general oligopolistic equilibrium, firms choice between a traditional CRS and a modern IRS technology results in three different equilibria, featuring no, incomplete, or complete industrialisation across a continuum of sectors. With labour being sufficiently scarce, multiple equilibria exist, and the economy may end up trapped in an incompletely industrialised low-welfare equilibrium as firms fail to coordinate their technology choices. Since the adoption of the modern technology is impeded by tougher competition through international trade, the vicious circle of poverty is aggravated by the forces of globalisation.

JEL-codes: F12 F43 O14 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/145707/1/VfS_2016_pid_6698.pdf (application/pdf)

Related works:
Working Paper: Industrialisation and the big push in a global economy (2020)
Working Paper: Industrialisation and the Big Push in a Global Economy (2017)
Working Paper: Industrialisation and the big push in a global economy (2017)
Working Paper: Industrialisation and the big push in a global economy (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc16:145707

Access Statistics for this paper

More papers in VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().