A Dynamic North-South Model of Demand-Induced Product Cycles

Reto Föllmi, Sandra Hanslin Grossmann () and Andreas Kohler
Authors registered in the RePEc Author Service: Reto Foellmi

VfS Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century from Verein für Socialpolitik / German Economic Association

Abstract: This paper presents a dynamic North-South general equilibrium model with non- homothetic preferences. Innovation takes place in the rich North while firms in the poor South at random imitate products manufactured in the North. The model is able to generate endogenous product cycles as described by Vernon (1966) where the different stages of the product cycle are not only determined by supply side factors but also by the distribution of income between North and South. We simulate comparative statics results of changes in Southern labor productivity, changes in inequality across regions, and changes in the savings rate. We further provide suggestive evidence for the product cycle stages.

JEL-codes: F10 O14 O31 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-dge and nep-ino
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: A dynamic North-South model of demand-induced product cycles (2018)
Working Paper: A Dynamic North-South Model of Demand-Induced Product Cycles (2015)
Working Paper: A dynamic North-South model of demand-induced product cycles (2015)
Working Paper: A Dynamic North-South Model of Demand-Induced Product Cycles (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc12:62023

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