EconPapers    
Economics at your fingertips  
 

Trade, Sectorial Reallocation, and Growth

Pengfei Wang () and Danyang Xie
Additional contact information
Pengfei Wang: Department of Economics, HKUST

Annals of Economics and Finance, 2018, vol. 19, issue 1, 49-74

Abstract: This paper introduces sectorial heterogeneity in TFPs in a growth model to generate new insights on trade, sectorial reallocation, and economic growth. The rate of overall economic growth in this model is a simple average of sectorial growth in a closed economy, but will depend on trade parameters in an open economy as openness to trade shifts resources toward fast-growing sectors. We find that the overall growth rate is unambiguously higher as the number of trading partners increases. These conclusions survive even after trade cost is introduced. Nevertheless, trade share and growth rate may not move in the same direction as trade liberalization is pursued or as the number of trading partners is increased. This finding may explain why the existing empirical evidence concerning this relationship between growth and trade share remains inconclusive.

Keywords: heterogeneous sectors; international trade; growth (search for similar items in EconPapers)
JEL-codes: F12 R13 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://down.aefweb.net/AefArticles/aef190102WangXie.pdf (application/pdf)

Related works:
Working Paper: Trade, Sectorial Reallocation, and Growth (2014) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cuf:journl:y:2018:v:19:i:1:wang:xie

Access Statistics for this article

Annals of Economics and Finance is currently edited by Heng-fu Zou

More articles in Annals of Economics and Finance from Society for AEF Contact information at EDIRC.
Bibliographic data for series maintained by Qiang Gao ().

 
Page updated 2018-09-11
Handle: RePEc:cuf:journl:y:2018:v:19:i:1:wang:xie