Can Productivity Progress in China hurt the US ? Professor Samuelson's Example Extended

Wenli Cheng and Dingsheng Zhang

No 12/05, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: This paper develops a general equilibrium 3-good Ricardian model that extends Professor Samuelson's example on the impact of productivity progress published in JEP (summer 2004). Our model highlights Professor Samuelson's insight that productivity progress can change the pattern of trade which in turn can have dramatic welfare implications. It also shows that while Professor Samuelson is correct that productivity growth in one country can hurt another, the loss is not as permanent as his example appears to suggest. Continuing productivity growth in one country is likely to benefit all trading countries in the long run.

Keywords: 3-good Ricardian model; impact of productivity growth; globalisation (search for similar items in EconPapers)
JEL-codes: F10 F11 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2005-07-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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