Factor Accumulation and Trade: Dynamic Comparative Advantage with Endogenous Physical and Human Capital

Eric Bond, Kathleen Trask and Ping Wang
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Kathleen Trask: Department of Economics, University of Kentucky

No 31, Vanderbilt University Department of Economics Working Papers from Vanderbilt University Department of Economics

Abstract: This paper develops a two country endogenous growth model with accumulation of both physical and human capital. We establish the existence of two country balanced growth equilibria in which physical and human capital grow at the same rate in each country but physical/human capital ratios differ across countries. These balanced growth equilibria satisfy a static and dynamic version of the Heckscher-Ohlin theorem. We also show the existence of unbalanced growth equilibria in which the static and dynamic Hechscher-Ohlin theorems can be violated. The multiplicity of paths with international trade results from the intertemporal no arbitrage condition in cases where trade results in an equalization of factor prices across countries.

Keywords: Trade patterns; factor accumulation; endogenous growth (search for similar items in EconPapers)
JEL-codes: D90 F11 F43 O41 (search for similar items in EconPapers)
Date: 1996-10, Revised 2000-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://www.accessecon.com/pubs/VUECON/vu00-w31.pdf Revised version, 2000 (application/pdf)

Related works:
Journal Article: Factor Accumulation and Trade: Dynamic Comparative Advantage with Endogenous Physical and Human Capital (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:van:wpaper:0031

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