Trade Liberalization and Endogenous Growth: A q-Theory Approach / Richard E. Baldwin, Rikard Forslid.

Format:

Book

Author/Creator:

Baldwin, Richard E.

Contributor:

National Bureau of Economic Research.

Forslid, Rikard.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5549.

NBER working paper series no. w5549

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Trade Liberalization and Endogenous Growth

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1996.

Summary:

This paper has two purposes. It introduces a direct approach to policy analysis in endogenous growth models - the q-theory approach - and uses this to illustrate several new openness-and-growth links that appear when we enrich the economic content of the early trade and growth models. The approach - inspired by Tobin's q - is merely a change of state variables and re-interpretation of steady-state conditions. The main difference is its focus on investment, which is after all, the heart of growth models. The approach's simplicity permits us to complicate the early models in interesting directions and to explicitly include trade barriers. The latter allows study of incremental policy reform rather than mere shifts from autarky to free trade (or small deviations from free trade) as in early literature.

Notes:

Print version record

April 1996.