The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Growth and International Trade

  • James Rauch
Reference work entry


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.


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 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • James Rauch
    • 1
  1. 1.