Dynamic Comparative Advantage and the Welfare Effects of Trade

Stephen Redding

Economics Papers from Economics Group, Nuffield College, University of Oxford

Abstract: This paper argues that developing economies may face a trade-off between specializaing according to existing comparative advantage (in low-technology goods), and entering sectors in which they currently lack a comparative advantage, but may acquire such an advantage in the future as a result of the potential for productivity growth (in high-technology goods). Comparative advantage is endogenously determined by past technological change, while simultaneously shaping current rates of innovation.

Keywords: ECONOMIC GROWTH; LEARNING; INTERNATIONAL TRADE; PRODUCTIVITY (search for similar items in EconPapers)
JEL-codes: F10 F43 O41 (search for similar items in EconPapers)
Pages: 35 pages
Date: 1997
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Citations: View citations in EconPapers (4)

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Journal Article: Dynamic Comparative Advantage and the Welfare Effects of Trade (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:nuf:econwp:140

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