BibTeX
@MISC{Devereux98growthand,
author = {Michael B. Devereux},
title = {Growth and the dynamics of trade liberalization},
year = {1998}
}
Share
 |
 |
 |
 |
||
OpenURL
Abstract
This paper develops a model of ongoing trade liberalization as a self-enforcing equilibrium in a game between governments. Economic growth is a critical ingredient in successful trade liberalization. But di⁄erences in national growth rates have profound di⁄erences on the sustainable tari ⁄ equilibria of the game. If international technology spillovers are not concentrated in high-growth sectors, faster growing countries will be more protectionist, setting higher tari⁄s and liberalizing trade at a later date. But with spillovers more concentrated in high-growth sectors, faster-growing countries may be less protectionist. Di⁄erences in growth rates lead the process of trade liberalization to be far from reciprocal. A sustainable trade liberalization may actually involve one country pursuing a unilateral policy of free trade, even though its trading partner imposes tari⁄s
Keyphrases
trade liberalization di erences high-growth sector later date critical ingredient sustainable tari equilibrium sustainable trade liberalization free trade self-enforcing equilibrium unilateral policy economic growth faster-growing country successful trade liberalization international technology spillover trading partner growth rate national growth rate
