Abstract
International trade is believed to promote growth for countries at the technological frontier by expanding the market over which to exploit new ideas. For countries behind the technological frontier, three views of the relationship between growth and international trade are described and assessed empirically: trade hampers growth for natural resource-abundant countries that specialize in the export of technologically stagnant primary products; trade acts as the ‘handmaiden’ of growth by improving the quality of investment and slowing the tendency of its return to fall; and trade acts as the engine of growth by providing a conduit for technology transfer.
Keywords
- Comparative advantage
- Economies and diseconomies of scale
- Foreign direct investment (FDI)
- Global commodity chains
- Growth and international trade
- Heckscher-Ohlin-Samuelson model
- International trade and technology
- Learning by doing
- Less developed countries
- Primary product exports
- Research and development
- Ricardo-Viner model
- Rybczynski effect
- Size of economies
- Technological progress
- Technology transfer
JEL Classifications
This chapter was originally published in The New Palgrave Dictionary of Economics, 2nd edition, 2008. Edited by Steven N. Durlauf and Lawrence E. Blume
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Rauch, J. (2008). Growth and International Trade. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_825-2
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DOI: https://doi.org/10.1057/978-1-349-95121-5_825-2
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Growth and International Trade- Published:
- 22 March 2017
DOI: https://doi.org/10.1057/978-1-349-95121-5_825-2
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Growth and International Trade- Published:
- 24 November 2016
DOI: https://doi.org/10.1057/978-1-349-95121-5_825-1