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Trade Patterns and Non-Scale Growth between Two Countries

Hiroaki Sasaki ()

Discussion papers from Graduate School of Economics Project Center, Kyoto University

Abstract: This paper builds a two-country, two-sector (manufacturing and agriculture), non-scale growth model and investigates the relationship between trade patterns and the growth rate of per capita real consumption. If the population growth rate of the home country is higher than that of the foreign country, the following results are obtained. (1) Under autarky, the growth rate of per capita real consumption is higher in the home country than in the foreign country. (2) Under free trade, if the home country completely specializes in manufacturing and the foreign country asymptotically completely specializes in agriculture, then the growth rate of the foreign country is higher than that of the home country, though this trade pattern is not sustainable in the long run. (3) Under free trade, if the home country produces both goods and the foreign country asymptotically completely specializes in agriculture, then the growth rates of the home country and the foreign country are equal, and this trade pattern is sustainable in the long run.

Keywords: non-scale growth model; trade patterns; population growth; per capita growth (search for similar items in EconPapers)
JEL-codes: F10 F43 O11 O41 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2012-08
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Persistent link: https://EconPapers.repec.org/RePEc:kue:dpaper:e-12-006

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