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Trade in a two sector endogenous growth model with two accumulating factors

Birgit Kirschbaum-Behl
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Birgit Kirschbaum-Behl: University of Greifswald, Germany

Theoretical and Applied Economics, 2019, vol. XXVI, issue 2(619), Summer, 217-259

Abstract: This paper provides an endogenous growth model including technology diffusion induced by openness. A two sector model composed of a consumption good sector and an education sector shows that the openness leads to a compensation of the lack considering the human capital stock. It is a comparison between a relatively less developed country, which does not use physical capital in the education sector, and a relatively developed country using both, human and physical capital in the education sector. By importing a relatively human capital intensive good, the relatively less developed country benefits from technology diffusion. This paper shows, that introducing trade implies a higher growth rate than in a closed economy.

Keywords: endogenous growth; accumulating factors; trade. (search for similar items in EconPapers)
Date: 2019
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Handle: RePEc:agr:journl:v:xxvi:y:2019:i:2(619):p:217-259