Growth, Trade and Unemployment

Marina Murat

Economia Internazionale / International Economics, 2002, vol. 55, issue 2, 155-176

Abstract: How are countries’ long run growth rates and employment levels affected by the international specialization of production? This paper presents an endogenous growth model where goods are produced in “modern” and “mature” sectors, which differ in the rate of knowledge accumulation and in the degree of inputs’ substitutability. The services of labor are crucial for producing the modern goods, whereas in the traditional industries workers are gradually replaced by capital. With trade, economies specializing in the modern productions have full employment and high growth rates, while countries specializing in the mature industries experience low growth and steady-state unemployment.

JEL-codes: D20 E24 F12 O41 (search for similar items in EconPapers)
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:ris:ecoint:0187

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