Trade, Urbanization, and Growth

45 Pages Posted: 21 Sep 2011

See all articles by Hwagyun Kim

Hwagyun Kim

Texas A&M University - Mays Business School

Seung Mo Choi

International Monetary Fund (IMF)

Xiaohan Ma

Texas Tech University

Date Written: September 21, 2011

Abstract

This paper proposes a neoclassical growth model of a small open economy, connecting international trade to real GDP growth and structural transformation from agriculture to non-agriculture. The calibrated model generates 'growth miracles,' to which the contributors are learning by doing and accelerated structural transformation. Quantitative results show that effects from the latter with opening up international trade are quintessential in accounting for the explosive growth patterns observed in newly industrialized economies. Trade policies (such as tariffs), relative productivity between agriculture and non-agriculture, and the persistence of urbanization process jointly affect the growth after opening.

Keywords: growth, urbanization, learning by doing, international trade

JEL Classification: O11, O24, O40

Suggested Citation

Kim, Hwagyun and Choi, Seung Mo and Ma, Xiaohan, Trade, Urbanization, and Growth (September 21, 2011). Mays Business School Research Paper No. 1931468, Available at SSRN: https://ssrn.com/abstract=1931468 or http://dx.doi.org/10.2139/ssrn.1931468

Hwagyun Kim (Contact Author)

Texas A&M University - Mays Business School ( email )

430 Wehner
College Station, TX 77843-4218
United States

Seung Mo Choi

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Xiaohan Ma

Texas Tech University ( email )

2500 Broadway
Lubbock, TX 79409
United States

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