Endogenous Technology Gap With North-South Trade

Sang-chul Yoon
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Sang-chul Yoon: Dankook University

Korean Economic Review, 2005, vol. 21, 255-276

Abstract: This paper examines a simple unbounded endogenous growth model of bounded trade-induced learning by doing to illustrate the long-run effects of North-South trade on economic growth. The concept of specialization in both innovative and imitative processes is incorporated into learning by doing model with North-South trade. In this model, international trade results in a dynamic feedback effect between Southern imitation and Norther innovation yielding a higher steady-state growth rate. In a wide-gap equilibrium, the effect of Southern imitation is greater that that of Northern innovation. However, the effect of Northern innovation is greater thatn that of Southern imitation under a narrow-gap equilibrium. The model reveals that North-South trade generates steady endogenous technology gap in the long run equilibrium.

Keywords: North-South trade; Endogenous technology gap; trade-induced learning-by-doing; Northern innovation; Southern imitation (search for similar items in EconPapers)
JEL-codes: F11 O16 O33 (search for similar items in EconPapers)
Date: 2005
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