GLOBAL ECONOMIC GROWTH, ELASTIC LABOR SUPPLY, KNOWLEDGE UTILIZATION AND CREATION WITH LEARNING-BY-DOING

Transcription

1 GLOBAL ECOOMIC GROWH ELASIC LABOR SUPPLY OWLEDGE UILIAIO AD CREAIO WIH LEARIG-BY-DOIG Wei-Bin HAG Risumeian Asia Pacific Universiy Oia-en apan Absrac his paper sudies issues relaed o global economic growh rade paerns and elasic labor supply wih capial accumulaion and nowledge creaion. rade paerns among counries are deermined by free compeiion and nowledge accumulaion is hrough learning by doing. his sudy considers nowledge as public good. nowledge is accessible o all he people in he world even hough differen counries apply nowledge wih differen efficiencies. he counries differ in preference (such as propensiies o save and o use leisure ime) nowledge uilizaion efficiency and creaiviy. irs we show ha he dynamics of he -counry world economy is described by differenial equaions. hen we simulae he moion of he global economy wih hree economies respecively called developed indusrializing and underdeveloped economies. We carry ou comparaive dynamic analysis wih regard o changes in nowledge uilizaion efficiency. eywords: Global Economic Growh; rade Paern; Elasic Labor Supply nowledge Uilizaion and Creaion; Learning-by-Doing EL classificaion:. IRODUCIO One of imporan quesions in economics is which counry and who will benefi from unprecedened globalizaion and fas increase in he producion capaciy. or undersanding modern poliics and economic life i is essenial o undersand possible effecs of rade upon naional and personal income disribuion in a globalizing world economy. Economic globalizaion and income inequaliy have been widely discussed in boh academic and policy forums. Poor counries hope o cach up wih rich counries in erms of living sandards; rich economies are concerned wih heir abiliy o susain living sandards as some developing economies are experiencing fas economic growh. o undersand economic growh susainabiliy and disribuion i is necessary o now he ey deerminans of hese phenomena. I has been ofen argued ha produciviy differences explain much of he variaion in incomes across counries and echnology plays a ey role in deermining produciviy [see aaima ; rugman and Venables 99; Manasse and urrini ; and Agénor ]. I is expeced ha worldwide main echnical changes are deermined largely by a few rich counries. Basing on he daase on impors of echnology and oal facor produciviy (P) over years

2 9 Wei-Bin HAG for he OECD counries Madsen [7] empirically shows ha nowledge spillovers have been a significan conribuor o he P convergence among he OECD counries over he period of 7 o. Using a muli-secor version of he Ricardo-Viner model of inernaional rade o empirically idenify he effecs of echnological change and inernaional rade on he US wage premium Blum [] finds ha capial was reallocaed o secors where i is relaively complemenary o silled worers. Boh capial accumulaion and echnological change are imporan for explaining naional as well as global economic growh and disribuion. he purpose of his sudy is o build a global economic growh model wih endogenous nowledge and capial accumulaion. As globalizaion is deepening i is imporan o provide analyical framewors for analyzing global economic ineracions no only among developed economies bu reaing he world as an inegraed whole. or insance i is imporan o examine how a developing economy lie India or China may affec differen economies as is echnology is improved wealh is accumulaed populaion is increased; or how rade paerns may be affeced as echnologies are furher improved or propensiies o save are reduced in developed economies lie he US or apan. All hese quesions are currenly well discussed in academics as well as public. As menioned by indlay (9) one opic ha was almos enirely absen from he pure heory of inernaional rade was any consideraion of he connecion beween economic growh and inernaional rade in he classical lieraure of economic heory. Almos all he rade models developed before he 9s are saic in he sense ha he supplies of facors of producion are given and do no vary over ime; he classical Ricardian heory of comparaive advanage and he Hecscher-Ohlin heory are saic since labor and capial socs (or land) are assumed o be given and consan over ime. I has only been in he las hree or four decades ha rade heory has made some sysemaic reamen of capial accumulaion or echnological changes in he conex of inernaional economics. According o he neoclassical growh model a poor economy may cach up wih rich ones because of decreasing marginal produc of capial. Mos of rade models wih endogenous capial and/or nowledge are eiher limied o wo-counry or small open economies [see Wong 99; ensen and Wong 99; Obsfeld and Rogoff 99; and hang ]. We will build a muli-counry rade model wih capial accumulaion and nowledge creaion in a perfecly compeiive global economy. As far as capial is concerned our model is influenced by neoclassical rade heory. rade models wih capial movemens are originaed by MacDougall [9] and emp [9]. everheless hese early models were limied o saic and one-commodiy framewors. he firs dynamic growh model of rade wih capial accumulaion and microeconomic foundaion was buil by Onii and Uzawa [9]. he model aes accoun of accumulaing capial socs and of growing populaion wihin he Hecscher-Ohlin ype of model. I was developed in erms of he wo-counry wo-good wo-facor model of rade. he model is also exended o sudy he dynamics of capial accumulaion and he various balance of paymens accouns. here is anoher alernaive specificaion of rade srucure in he growh framewor which allows for he exisence of inernaional financial mares and for free rade in consumpion goods and securiies bu no in invesmen goods [see Wong 99; ones and enen 9; Ehier and Svesson 9; and Bhagwai 99]. I should be noed ha Sorger [] proposed a rade model based on he Solow approach. Velluini [] proposes a rade model o examine possible povery raps due o capial mobiliy. Many wo-counry dynamic-opimizaion models wih capial accumulaion have been proposed o examine he

3 Global Economic Growh Elasic Labor Supply nowledge Uilizaion and Creaion wih impac of saving echnology and various policies upon rade paerns [see renel and Razin 97; ensen 99; Valdés 99; and ishimura and Shimomura ]. rade economiss have recenly developed differen rade models in which endogenous growh is generaed eiher by he developmen of new varieies of inermediae or final goods or by he improvemen of an exising se of goods wih endogenous echnologies [see Chari and Hopenhayn 99; Marin and Oaviano ; occo ; Brecher e al. ; and Gusafsson and Segersrom ]. hese sudies aemped o formalize rade paerns wih endogenous echnological change and monopolisic compeiion. Wihin such framewors he dynamic inerdependence beween rade paerns R&D effors and various economic policies are conneced. everheless mos of hese models do no explicily deal wih boh capial and nowledge wihin he same framewor. he model is his sudy is o inegrae he wo mainsreams of rade growh wihin a comprehensive framewor. In fac he model in his sudy is a furher developmen of he wo models by hang [99 a]. he previous sudies were only concerned wih examining equilibrium and comparaive saics analysis wihou endogenous nowledge. his sudy simulaes he model o show how he sysem moves over ime wih endogenous and how he moion of he sysem is affeced when some parameers are changed. his paper is organized as follows. Secion defines he muli-counry model wih capial accumulaion and nowledge creaion. Secion shows ha he dynamics of he world economy wih counries can be described by differenial equaions. As mahemaical analysis of he sysem is oo complicaed we demonsrae some of he dynamic properies by simulaion when he world economy consiss of hree counries. Secion examines effecs of changes in some parameers on he pahs of he global economic dynamics. Secion concludes he sudy. he analyical resuls in Secion are proved in Appendix.. HE MULI-COURY RADE MODEL WIH CAPIAL AD OWLEDGE Each counry has one producion secor. nowledge growh is hrough learning by doing. In describing he producion secor we follow he neoclassical rade framewor. I is assumed ha he counries produce a homogenous commodiy. his follows he Onii- Uzawa rade model and is various exensions wih one capial goods [Ieda and Ono 99]. Mos aspecs of producion secors in our model are similar o he neo-classical onesecor growh model [Burmeiser and Dobell 97]. here is only one (durable) good in he global economy under consideraion. Households own asses of he economy and disribue heir incomes o consume and save. Producion secors or firms use capial and labor. Exchanges ae place in perfecly compeiive mares. Producion secors sell heir produc o households or o oher secors and households sell heir labor and asses o producion secors. acor mares wor well; facors are inelasically supplied and he available facors are fully uilized a every momen. Saving is underaen only by households which implies ha all earnings of firms are disribued in he form of paymens o facors of producion. We omi he possibiliy of hoarding of oupu in he form of non-producive invenories held by households. All savings voluneered by households are absorbed by firms. We require savings and invesmen o be equal a any poin of ime. he sysem consiss of muliple counries indexed by.... Each counry has a fixed labor force (... ). Le prices be measured in erms of he commodiy and he price of he commodiy be uniy.

4 Wei-Bin HAG We denoe wage and ineres raes by w and r respecively in he h counry. In he free rade sysem he ineres rae is idenical hroughou he world economy i.e. r r. Behavior of producers irs we describe behavior of he producion secions. Le and sand for respecively he oupu level of he producion secor and capial socs employed by counry. We assume ha here are hree facors nowledge physical capial and labor a each poin of ime. he producion funcions are specified as follows m A A in which ( ) where counry is he world nowledge soc a ime. he oal labor supply is is he woring hours of a worer in counry. Here we inerpre m / ' s level of human capial. he erm is counry m / as ' s human capial or qualified labor force. We see ha he producion funcion is a neoclassical one and homogeneous of degree one wih he inpus. Here we call m counry ' s nowledge uilizaion efficiency pa- rameer. As culures poliical sysems and educaional and raining sysems vary beween counries m are differen. Mares are compeiive; hus labor and capial earn heir marginal producs and firms earn zero profis. he rae of ineres r and wage raes w are deermined by mares. Hence for any individual firm secor chooses he wo variables and o maximize is profi. he marginal condiions are given by where r r and w are given a each poin of ime. he producion A m m w A are he depreciaion rae of physical capial in counry and /. Behavior of consumers Each worer may ge income from wealh ownership and wages. Consumers mae decisions on consumpion levels of goods as well as on how much o save. his sudy uses he approach o consumers behavior proposed by hang in he early 99s. Le he per capia wealh in counry. Each consumer of counry obains income y r w () sand for () from he ineres paymen r and he wage paymen w. We call y he curren income in he sense ha i comes from consumers paymen and consumers curren earnings from ownership of wealh. he sum of income ha consumers are using for consuming saving or ransferring are no necessarily equal o he emporary income because consumers can sell wealh o pay for insance he curren consumpion if he emporary income is no sufficien for buying food and ouring he counry. he oal value of wealh ha a consumer in counry can sell o purchase goods and o save is equal o (). Here we assume ha selling and

5 U Global Economic Growh Elasic Labor Supply nowledge Uilizaion and Creaion wih... buying wealh can be conduced insananeously wihou any ransacion cos. he disposable income is equal o yˆ y (). he disposable income is used for saving and consumpion. I should be noed ha he value p wih p ) in he above equaion is a flow variable. Under (i.e. he assumpion ha selling wealh can be conduced insananeously wihou any ransacion cos we may consider as he amoun of he income ha he consumer obains a ime by selling all of his wealh. Hence a ime he consumer has he oal amoun of income equalling ˆ o disribue beween consuming and saving. I should also be remared ha y in he growh lieraure for insance in he Solow model he saving is ou of he curren income y while in his sudy he saving is ou of he disposable income. his approach is discussed a lengh by hang (). hang has also examined he relaions beween his approach and he Solow growh heory he Ramsey growh heory he permanen income hypohesis and he eynesian consumpion funcion in deails. he disposable income is used for saving and consumpion. A each poin of ime he represenaive consumer would disribue he oal available budge among savings s and consumpion of goods c. he budge consrain is given by c s yˆ. () Le denoe he oal available ime. he ime consrain requires ha he amouns of ime allocaed o each specific use add up o he ime available. () Subsiuing () ino he budge consrains () yields w c s y r w (). We can inerpre he righ-hand erm as he poenial disposable income in he sense ha if he worer devoes all he available ime o wor how much he can use for consuming and saving. he erm w is he opporuniy cos of leisure ime. Hence he lef-hand is he sum of he opporuniy cos he expendiure of consumpion and he saving. A each poin of ime households decide he leisure ime consumpion level and savings subec o he poenial disposable income. We assume ha uiliy level U is dependen on c and s as follows U c s where and are respecively counry s propensiies o use he leisure ime o consume goods and o hold wealh. Maximizing subec o he budge consrains () yields w y c y s y () where where and are respecively household s propensiies o use he leisure ime o consume and o hold wealh. Here for simpliciy we specify he uiliy funcion wih he Cobb- (7)

6 a z Wei-Bin HAG Douglas from. I would provide more insighs if we ae some oher forms of uiliy funcions. In his sudy we fix he preference srucure. According o he definiions of s he wealh accumulaion of he represenaive household in counry is given by s. his equaion simply saes ha he change in wealh is equal o he saving minus dissaving. nowledge creaion hrough learning by doing High creaiviy and wide applicaion of nowledge is he main characerisic of modern economies. Lie in he radiional growh models wih endogenous we assume ha nowledge growh is hrough learning by doing. We propose he following equaion for nowledge growh ( ) z () in which ( ) is he depreciaion rae of nowledge and and are parameers. he z parameers and are non-negaive. We inerpre / as he conribuion o nowledge accumulaion hrough learning by doing by counry ' s producion secor. o see how learning by doing occurs assume ha nowledge is a funcion of counry ' s oal indusrial oupu during some period a ( ) d ( ) a a in which a a and a are posiive parameers. he above equaion implies ha he nowledge accumulaion hrough learning by doing exhibis decreasing (increasing) reurns o scale in he case of a ( ). We inerpre a and a as he measuremens of he efficiency of learning by doing by he producion secor. aing he derivaives of he equaion yields / in which a a and a. Le and sand for respecively he capial socs of he world economy he capial socs employed and he wealh owned by counry. he oal capial socs employed by he world is equal o he wealh owned by he world. ha is (9). () he world producion is equal o he world consumpion and world ne savings. ha is S C where C E c S s. he rade balances of he economies are given by r.

7 When Global Economic Growh Elasic Labor Supply nowledge Uilizaion and Creaion wih... E is posiive (negaive) we say ha counry is in rade surplus (defici). E is zero counry ' s rade is in balance. When We have hus buil he model wih rade economic growh capial accumulaion nowledge creaion and uilizaion in he world economy in which he domesic mares of each counry are perfecly compeiive inernaional produc and capial mares are freely mobile and labor is inernaionally immobile.. HE WORLD ECOOMIC DYAMICS As our model describe economic dynamics of muliple counries he global dynamics should be described by highly dimensional differenial equaions. We will simulae he model when he households have differen preferences. We firs show ha he dynamics of he world economy can be expressed by differenial equaions. Lemma he dynamics of he world economy is governed by he following dimensional differenial equaions sysem wih... in which and are unique funcions of and Appendix. or given posiive values of and and as he variables a any poin of ime defined in a any poin of ime he oher variables are uniquely deermined by he following procedure: by (A7) by (A) r and w by (A) by (A) y m by he definiion c and s by () A. We have he dynamic equaions for he world economy wih any number of counries. he sysem is nonlinear and is of high dimension. I is difficul o generally analyze behavior of he sysem. We now solve equilibrium problem. or simpliciy we require.... Equaions (A) and (A) now become where m / m w w / A A () w m m m w A m m m. w By equaions (7) we have s. By he definiion of R and equaions () we have m A R rom s and (A9) we have u ()

8 Wei-Bin HAG m w w m A u... where we use () and /. By equaions (A) a equilibrium we have u () () w R m in which we use. Subsiuing / ino (A) and seing he resuled equaion a equilibrium we have in which x m m. x / A z () We see ha wo equaions and conain wo variables and. he wo equaions deermine equilibrium values of and. By equaions () we deermine for.... ollowing he procedure in Lemma we deermine all he oher variables a equilibrium. We see ha in order o solve equilibrium he main problem is o solve and for and. As we canno explicily solve he equilibrium values of and we simulae he model o illusrae properies of he global economy. We specify he parameers as follows: A m... A. m A m (7) Counry and ' s populaions are respecively and. Counry has he larges populaion. Counry and ' s oal produciviies A are respecively. and.7. Counry and ' s uilizaion efficiency parameers m are respecively.. and.. Counry uilizes nowledge mosly effecively; counry nex and counry uilizes nowledge les effecively. We call he hree counries respecively as developed indusrializing and underdeveloped economies (DE IE UE). We specify he values of he parameers in he Cobb-Douglas producions approximaely equal o.. he value is ofen used in empirical sudies [for insance Miles and Sco ; Abel e al. 7]. he DE s learning by doing parameer i is he highes among he counries. he reurns o scale parameers in learning by doing i are all posiive which implies ha nowledge exhibis decreasing reurns o scale in learning by doing. he depreciaion raes of physical capial and nowledge are specified respecively a. and.. he DE s propensiy o save is. 7 and he UE s propensiy o save is.. he value of he IE s propensiy is beween he wo oher counries. he hree economies have he equal propensiy o enoy leisure. We inroduce counry ' s reurns o scale parameers for he producion secor as follows:

9 Global Economic Growh Elasic Labor Supply nowledge Uilizaion and Creaion wih... m * x which are respecively equal o.7.9. wih he specified values of he parameers. We have x * for all. As no economy in he global economy exhibis decreasing i reurns o scale i is expeced ha he dynamic sysem has a unique equilibrium poin and i is sable. We now show ha he dynamic sysem has a unique equilibrium poin. igure no. plos he wo equaions and for and. he solid lines represen and he dashed line sands for. 7 igure no. Soluions of Equaions () and () As shown in igure here is a unique meaningful soluion as follows... he soluion is meaningful in he sense ha all he oher variables are economically meaningful. We evaluae he oher variables a he unique equilibrium poin as in able. he global oupu is. and he ineres rae is abou. 7 percen. he shares of he global oupus by he DE ID and UD are respecively 7 and percen. I should be noed ha he populaion shares of he hree economies are respecively. 7 and. percen. he per-worer oupu levels of he DE ID and UD are respecively.. 7 and.. he differences in labor produciviy are mainly due o he differences in nowledge uilizaion efficiency. he able also gives he labor and wealh disribuions among he counries. e capial soc employed per worer in he DE is almos wice as much as in he ID and almos hree imes in he U. he wage raes in he DE ID and UD are respecively.. and.9. he DE is in rade surplus and he oher wo economies in rade defici.

10 Wei-Bin HAG he worer in he UD wors longes hours and he worer in he DE shores hours. he wealh and consumpion per capia in he DE is much higher han in he UD. able no. he equilibrium values of he global economy r C Counry Counry Counry / / C. C. 7 w.. c.. 7 E. w.. c. 7. / E C. w c.. 7 E. 9 So far we have been concerned wih equilibrium. As he four eigenvalues a equilibrium are as follows.7... we see ha he equilibrium is sable. We sar wih differen iniial saes no far away from he equilibrium poin and find ha he sysem approaches o he equilibrium poin. his also demonsraes ha he sysem is sable. In igure we plo he moion of he sysem wih he following iniial condiions.... he sysem approaches o is equilibrium in he long erm.

11 Global Economic Growh Elasic Labor Supply nowledge Uilizaion and Creaion wih r E E.... C. E.... C C C w c.... w.. c w.. c igure no. he Moion of he Global Economy. COMPARAIVE DYAMIC AALYSIS We simulaed he moion of he dynamic sysem. I is imporan o as quesions such as how a developing economy lie India or China may affec he global economy as is echnology is improved or populaion is enlarged; or how he global rade paerns may be affeced as echnologies are furher improved or propensiies o save are increased in developed economies lie he USA or apan. he res of his paper examines effecs of changes in some parameers on dynamic processes of he global economic sysem. irs we examine he case ha all he parameers excep counry s nowledge uilizaion efficiency m are he same as in (7). We reduce he nowledge efficiency parameer m from. o.. he simulaion resuls are demonsraed in igure. In he plos a variable x sands for he change rae of he variable x in percenage due o changes in he parameer value from m (. in his case) o m (. ). ha is x x ; m x ; m x ; m where x ; m sands for he value of he variable x wih he parameer value m a ime and x ; m sands for he value of he variable x wih he parameer value m a ime. We will use he symbol wih he same meaning when we analyze oher parameers.

12 Wei-Bin HAG r C E E E C C C w c w c c w igure no. he developed economy applies nowledge less effecively As he DE uses nowledge less effecively he nowledge oupu and capial of he global economy are reduced. he rae of ineres falls iniially and hen rises (over is previous level). In he opposie direcion o he moion of he rae of ineres he consumpion level of each counry rises iniially and hen falls. In he long erm he labor supply of each counry is no affeced. he capials socs employed by all he counries are reduced. he wage raes and per capia wealh of all he counries are reduced. We see ha all he economies in he well-conneced global sysem will suffer from a reducion in he DE s nowledge uilizaion. We now examine effecs of changes in creaiviy parameers in learning by doing. We increase he DE s learning by doing efficiency as follows: :... he effecs are ploed in igure. he nowledge global wealh and oupu levels are all increased. he rae of ineres rises iniially and falls laer on. he oal oupu and consumpion levels oal wealh per capia consumpion levels and per capia wealh levels of he hree economies are all increased. he rade balance of he DE improves and he oher wo economies deeriorae. All he households in he global economy wor longer hours han before. he DE benefis more han he oher wo economies because is nowledge uilizaion efficiency is higher han he oher economies.

13 Global Economic Growh Elasic Labor Supply nowledge Uilizaion and Creaion wih r C E E E C C C w w w..... c c c igure no. he developed economy becomes more creaive. COCLUSIOS his paper buil a muli-counry growh model of endogenous labor supply wih capial accumulaion and nowledge creaion wih learning by doing. If we neglec inernaional rade and assume nowledge soc and woring ime o be consan hen he model is similar o he Solow growh model. he rade model wihou consan nowledge soc is similar o he Onii-Uzawa model. We show ha he dynamics of -counry world economy is described by differenial equaions. We simulaed he moion of he model and demonsraed effecs of changes in he parameers. he model wih he specified parameer values (which imply no-increasing reurn scales) has a unique equilibrium. I can be shown ha if some economies exhibi increasing reurns o scale hen here exis muliple equilibrium poins. o which equilibrium poin he sysem evolves is dependen on iniial condiions. When differences in nowledge uilizaion efficiency and preference exis our model does no generae global convergence. I is well nown ha one-secor growh model has been generalized and exended in many direcions. here are muliple producion secors and households are no homogenous. I is no difficul o generalize our model along hese lines. I is also possible o develop he model in discree ime. We may analyze behavior of he model wih oher forms of producion or uiliy funcions. Appendix: Proving Lemma irs from equaions () we obain m A... (A) m A where. I should be noed ha. rom equaions () and (A) we deermine he wage raes as funcions of and as follows m m A w A. r (A) /

14 Wei-Bin HAG rom y w in () and he definiion of y we have.. (A) By () and (A) he labor supply is given by. (A) rom and (A) we solve m (A) where.. m By () and (A) we have m (A) where. rom (A) and () we have (A7) in which. m m m rom (A)-(A7) we see ha he capial disribuion among he counries and he global capial are uniquely deermined as funcions of and. Subsiuing m ino () we have. A z m (A) We see ha he moion of can be described as a unique funcion of and. Inroduce. rom (A7) we see ha counry s per capia wealh can be expressed as a unique funcion of he nowledge counry s capial inensiy and he oher counries per capia wealh a any poin of ime. Subsiuing w r y ino y s yields. w r s (A9) Subsiuing (A9) ino (7) we have R w (A)... r w (A)

15 Global Economic Growh Elasic Labor Supply nowledge Uilizaion and Creaion wih... in which R. r aing derivaives of equaion (A7) wih respec o yields (A) where. Equaling he righ-hand sizes of equaions (A) and (A) we ge w R. Subsiue equaion (A) ino he above equaion w R (A) where we use equaions (A) and (A). In summary we proved Lemma. References [] Abel A. Bernane B.S. Croushore D. Macroeconomics Prenice Hall ew ersey 7. [] Agénor P.R. Does globalizaion hur he poor? Inernaional Economics and Economic Policy -. [] Bhagwai.. (Ed.) Inernaional rade - seleced readings MI Press Mass. Cambridge 99. [] Blum B.S. rade echnology and he rise of he service secor: he effecs on us wage inequaliy ournal of Inernaional Economics 7 -. [] Brecher R.A. Chen.Q. Choudhri E.U. Absolue and comparaive advanage reconsidered: he paern of inernaional rade wih opimal saving Review of Inernaional Economics -. [] Burmeiser E. Dobell A.R. Mahemaical heories of economic growh Collier Macmillan Publishers London 97. [7] Chari V.V. Hopenhayn H. Vinage human capial growh and he diffusion of new echnology he ournal of Poliical Economy [] Ehrlich I. Lui. he problem of populaion and growh: a review of he lieraure from Malhus o conemporary models of endogenous populaion and endogenous growh ournal of Economic Dynamics and Conrol [9] indlay R. Growh and developmen in rade models in ones R.W. enen R.B. (Eds.): Handboo of inernaional economics orh-holland Amserdam 9. [] renel.a. Razin A. iscal policy and he world economy MI Press MA. Cambridge 97. [] Gusafsson P. Segersrom P. orh-souh rade wih increasing produc variey ournal of Developmen Economics [] Ieda S. Ono Y. Macroeconomic dynamics in a muli-counry economy - a dynamic opimizaion approach Inernaional Economic Review [] ensen B.S. he dynamic sysems of basic economic growh models luwer Academic Publishers Dordrech 99. [] ensen B.S. Wong.Y. (Eds.) Dynamics economic growh and inernaional rade he Universiy of Michigan Press Ann Arbor 99. [] emp M.C. oreign invesmen and naional advanage Economic Record - 9. [] rugman P. Venables A.. Globalizaion and he Inequaliy. Quarerly ournal of Economics 7-99.

16 Wei-Bin HAG [7] MacDougall G.D.A. he benefis and coss of privae invesmen from abroad: a heoreical approach Economic Record 7-9. [] Manasse P. urrini A. rade wages and supersars ournal of Inernaional Economics [9] Marin P. Oaviano G. Growh and agglomeraion Inernaional Economic Review 97-. [] Madsen.B. echnology Spillover hrough rade and P Convergence: Years of Evidence for he OECD Counries ournal of Inernaional Economics 7-7. [] Miles D. Sco A. Macroeconomics - Undersanding he Wealh o aions ohn Wiley Sons Ld. Chicheser [] aaima. Cach-up in urn in a muli-counry inernaional rade model wih learning-bydoing and inervenion ournal of Developmen Economics [] ishimura. Shimomura. rade and indeerminacy in a dynamic general equilibrium model ournal of Economic heory -. [] occo A. he rise and fall of regional inequaliies wih echnological differences and nowledge spillovers Regional Science and Urban Economics -9. [] Obsfeld M. Rogoff. oundaions of Inernaional Macroeconomics MI Press Mass. Cambridge 99. [] Onii H. Uzawa H. Paerns of rade and invesmen in a dynamic model of inernaional rade Review of Economic Sudies - 9. [7] Sorger G. On he muli-counry version of he Solow-Swan model he apanese Economic Review -. [] Valdés B. Economic Growh - heory Empirics and Policy Edward Elgar Chelenham 999. [9] Velluini C. Capial mobiliy and underdevelopmen raps ournal of Developmen Economics 7. [] Wong.Y. Inernaional rade in Goods and acor Mobiliy MI Press Mass. Cambridge 99. [] hang W.B. rade and world economic growh - differences in nowledge uilizaion and creaiviy Economic Leers [] hang W.B. Inernaional rade heory: capial nowledge economic srucure money and prices over ime and space Springer Berlin. [] hang W.B. A muli-region economic model wih migraion housing and regional ameniy Annals of he Alexandru Ioan Cuza Universiy of Iasi Economic Sciences Secion - a.