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

A. Patrick Minford, Eric Nowell and Jonathan Riley

No 1165, CEPR Discussion Papers from Centre for Economic Policy Research

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.

Keywords: Development; Technological Transfer; Unemployment; Unskilled Labour; Wage Dispersion (search for similar items in EconPapers)
JEL-codes: F11 F21 O11 (search for similar items in EconPapers)
Date: 1995-05
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Citations: View citations in EconPapers (6)

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