Skip to main content
Article thumbnail
Location of Repository

The Stability of Economics Integration and Endogenous Growth

By Michael B. Devereux and Beverly J. Lapham

Abstract

This paper examines the transitional dynamics of economic integration in the two country endogenous growth model of Rivera-Batiz and Romer (1991) and in an extension by Rivera-Batiz and Xie (1992). It is shown that, in the absence of knowledge flows across countries economic integration will generically lead to a corner solution where only one country does all the R&D and the other specializes in manufactures. When countries are symmetric the world growth rate in this equilibrium will always be higher than in autarky. When countries differ in their human capital endowment, the world growth rate with trade is always greater than the autarky growth rate of the "low-growth"country, but may or may not be greater than the autarky growth rate of the "high-growth" country.

OAI identifier:
Download PDF:
Sorry, we are unable to provide the full text but you may find it at the following location(s):
  • http://qed.econ.queensu.ca/wor... (external link)
  • Suggested articles


    To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.