Neoclassical Growth and Commodity Trade
Alejandro Cunat () and
Marco Maffezzoli ()
Review of Economic Dynamics, 2004, vol. 7, issue 3, 707-736
We construct a dynamic Heckscher-Ohlin model in which the initial distribution of production factors across economies makes factor price equalization impossible. The model produces dynamics similar to those of the neoclassical growth model. However, free trade prevents identically parameterized economies from achieving identical steady states. Although poor economies grow faster than rich economies during the transition to the steady state, the former do not catch up with the income per capita levels of the latter. A many-country version of the model exemplifies the open-economy neoclassical growth model's ability to produce interesting distribution dynamics of income per capita. (Copyright: Elsevier)
Keywords: International trade; Heckscher-Ohlin; Economic growth; Convergence (search for similar items in EconPapers)
JEL-codes: F1 F4 O4 (search for similar items in EconPapers)
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