North-South Models of Growth and Trade

43 Pages Posted: 13 Dec 2002

See all articles by Michael K.F. Chui

Michael K.F. Chui

Bank for International Settlements (BIS)

Paul Levine

School of Economics, University of Surrey

Syed Mansoob Murshed

Institute of Social Studies (ISS)

Joseph Pearlman

London Metropolitan University - Department of Economics, Finance and International Business (EFIB)

Abstract

The paper surveys the literature that combines growth and trade into models of North-South interaction. We distinguish two strands of growth theory: Old (exogenous) and new (endogenous) growth. We also distinguish old trade theory which assumes constant returns to scale and perfect competition, and new trade theory which relaxes both of these assumptions. This gives us four possible combinations of growth and trade theories which provide the basis of the taxonomy employed in our survey. We address the following long-standing issues raised in the literature: first, given that one of the North-South asymmetries is that the North leads in technical progress, how does the South adjust to such changes? Second, can the models explain patterns of trade and income differentials between the regions? Third, do asymmetries mean that standard prescriptions on the mutual benefits of free trade and free movements of capital need to be modified? Finally, can our models explain why the South continues to favour protection of its manufacturing sectors at the same time that barriers within the North are being dismantled?

JEL Classification: F43, O41

Suggested Citation

Chui, Michael K.F. and Levine, Paul L. and Murshed, Syed Mansoob and Pearlman, Joseph G., North-South Models of Growth and Trade. Journal of Economic Surveys, Vol. 16, pp. 123-165, 2002. Available at SSRN: https://ssrn.com/abstract=309147

Michael K.F. Chui (Contact Author)

Bank for International Settlements (BIS) ( email )

CH-4002 Basel, Basel-Stadt
Switzerland

Paul L. Levine

School of Economics, University of Surrey ( email )

Guildford
Surrey GU2 7XH
United Kingdom
+44 1483 259 380 Ext. 2773 (Phone)
+44 1483 259 548 (Fax)

Syed Mansoob Murshed

Institute of Social Studies (ISS) ( email )

PO Box 29776
2502 LT The Hague, 2518 AX
Netherlands
+31 70 426 0591 (Phone)
+31 70 426 0799 (Fax)

Joseph G. Pearlman

London Metropolitan University - Department of Economics, Finance and International Business (EFIB) ( email )

Economics Subject Group, LMBS
London EC2M 6SQ, EC2M 6SQ
United Kingdom

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