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

Michael Chui, Paul Levine () and Joseph Pearlman

No 2291, CEPR Discussion Papers from Centre for Economic Policy Research

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.

Keywords: Distribution; Economic Growth; Gains from Trade (search for similar items in EconPapers)
JEL-codes: F43 O41 (search for similar items in EconPapers)
Date: 1999-11
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Citations: View citations in EconPapers (4)

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Journal Article: Winners and losers in a North-South model of growth, innovation and product cycles (2001)
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