International convergence and local divergence
Adolfo Cristobal-Campoamor ()
No 008-08, Working Papers from International School of Economics at TSU, Tbilisi, Republic of Georgia
This paper presents an East-West endogenous-growth model that reproduces recent stylized facts applicable to the trade liberalization process of many developing countries: convergence with the rest of the world, higher internal divergence, increasing spatial concentration of economic activity and higher growth rates. We claim that the ongoing reduction of manufacturing trade costs may generate a net inflow of global demand towards the industrialized cores of developing countries. This will induce a reallocation of labor from traditional to modern sectors. In turn, such a sectoral shift may enlarge the catch-up (imitation) potential of developing countries and raise global growth rates, due to Grossman and Helpman's complementarity between imitative and innovative activities. Although advanced economies may become relatively worse off, the effect on growth rates may allow them to gain in absolute terms.
JEL-codes: F43 R11 (search for similar items in EconPapers)
Pages: 33 pages
References: View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
https://iset.tsu.ge/files/008-08.pdf First version, 2008 (application/pdf)
Journal Article: International convergence and local divergence (2009)
Working Paper: International convergence and local divergence (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:tbs:wpaper:08-008
Access Statistics for this paper
More papers in Working Papers from International School of Economics at TSU, Tbilisi, Republic of Georgia Contact information at EDIRC.
Bibliographic data for series maintained by ( this e-mail address is bad, please contact ).