Global Income Divergence, Trade, and Industrialization: The Geography of Growth Take-Offs

Richard Baldwin, Philippe Martin and Gianmarco Ottaviano

Chapter 2 in Firms and Workers in a Globalized World:Larger Markets, Tougher Competition, 2021, pp 25-57 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This article formalizes the theoretical interconnections among four post–industrial revolution phenomena—the industrialization and growth take-off of rich northern nations, massive global income divergence, and rapid trade expansion. In stages-of-growth model, the four phenomena are jointly endogenous and are triggered by falling trade costs. In the first growth stage (with high trade costs) industry is dispersed internationally, and growth is low. In the second (medium trade costs), the North industrializes rapidly, growth take-off, and the South diverges. In the third (low trade costs), high growth and global divergence become self-sustaining. In the fourth stage, when the cases of “trading” ideas decreases, the South quickly industrializes and converges.

Keywords: Allocative Efficiency; Immigration; Inequality; Innovation; International Competition; International Trade; Macroeconomic Effects of Globalization; New Economic Geography; New Trade Theory; Offshoring; Regional Decline; Regional Growth; Territories; Waves of Globalization; Winners and Losers from Globalization; Borders; Creative Destruction; Cultural Diversity; Economic Geography; Economic Growth; Firm Heterogeneity; Firms and Workers; Globalization (search for similar items in EconPapers)
JEL-codes: F02 F6 F61 F62 (search for similar items in EconPapers)
Date: 2021
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Related works:
Journal Article: Global Income Divergence, Trade, and Industrialization: The Geography of Growth Take-Offs (2001)
Working Paper: Global Income Divergence, Trade, and Industrialization: The Geography of Growth Take-Offs (2001)
Working Paper: Global Income Divergence, Trade and Industrialization: The Geography of Growth Take-Offs (1998)
Working Paper: Global Income Divergence, Trade and Industrialisation: The Geography of Growth Take-Offs (1998)
Working Paper: Global Income Divergence, Trade and Industrialization: The Geography of Growth Take-Offs (1998)
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