Growth Due To Globalization

Fernando Perera-Tallo ()

International Economic Review, 2003, vol. 44, issue 2, 651-676

Abstract: This article presents a growth model including geographical space and transportation costs in which the geographical area where firms sell their product is endogenous. Growth is generated by the expansion of trade and there is a positive relationship between degree of openness and income level. The model explains why economies become increasingly more open and why the degree of openness is not robustly correlated with growth. In contrast to other growth models, investment in transport infrastructure plays an important role and the size of the country does not affect growth. Copyright 2003 By The Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:ier:iecrev:v:44:y:2003:i:2:p:651-676

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