Resources, innovation and growth in the global economy

Published

Journal Article

The relative performance of open economies is analyzed in an endogenous growth model with asymmetric trade. A resource-rich country trades resource-based intermediates for final goods produced by a resource-poor economy. The effects of an increase in the resource endowment depend on the elasticity of substitution between resources and labor in intermediates' production. Under substitution (complementarity), the resource boom generates higher (lower) income, lower (higher) employment in the primary sector and faster (slower) growth in the resource-rich economy. In the resource-poor economy, the shock induces a higher (lower) relative wage and positive (negative) growth effects that are exclusively due to trade. © 2011 Elsevier B.V.

Full Text

Duke Authors

Cited Authors

  • Peretto, PF; Valente, S

Published Date

  • May 1, 2011

Published In

Volume / Issue

  • 58 / 4

Start / End Page

  • 387 - 399

International Standard Serial Number (ISSN)

  • 0304-3932

Digital Object Identifier (DOI)

  • 10.1016/j.jmoneco.2011.07.001

Citation Source

  • Scopus