International trade and the sectoral composition of production
E. Cristina Echevarria
The main purpose of this study is to explore the interrelations between global economic growth and the changing composition of global trade. I define a global unbalanced growth path as a situation in which there exists a global constant return to capital. I use this definition to explore two claims regarding the sectoral composition of trade between primaries and non-primaries. First, in the long run, the comparative advantage in one good or the other is driven by the TFP differential in both sectors, which explains the fact that less developed countries tend to export primaries even though primaries are not less capital intensive. Second, non-homothetic preferences imply that, as the global economy develops, fewer and fewer countries export only or mostly primaries. (Copyright: Elsevier)
Sectoral composition; International trade; Economic growth
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