How product innovation in the North may immiserize the South: A new look at the Ricardian model with a continuum of goods
Abstract: The paper proposes a theoretical model investigating the welfare consequences of technological shocks in a Ricardian framework (a la Dornbush, Fisher and Samuelson, 1977). Contrary to the existing literature, the model incorporates a nonhomothetic demand function whose price and income ela...
| Publicado en: | Journal of Development Economics Vol. 97; no. 2; pp. 293 - 305 |
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| Formato: | Artículo |
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Elsevier B.V.
Mar2012
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=69534354&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 69534354 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 03043878 JDE jtl: Journal of Development Economics issn: 03043878 maglogo: N pubinfo: dt: Mar2012 vid: 97 iid: 2 pid: 1004 pub: Elsevier B.V. artinfo: ui: 69534354 10.1016/j.jdeveco.2011.03.002 ppf: 293 ppct: 12 formats: tig: atl: How product innovation in the North may immiserize the South: A new look at the Ricardian model with a continuum of goods aug: au: Demmou, Lilas affil: EERASME-EPI, University Paris 8, 2 rue de la liberté, 93256 Saint-Denis, France su: Technological innovations Public welfare Consumption (Economics) Economic development Technological progress Ricardian Model of International Trade sug: subj: Technological innovations Public welfare Consumption (Economics) Economic development Technological progress Health and Welfare Funds Other Individual and Family Services Emergency and Other Relief Services Administration of Human Resource Programs (except Education, Public Health, and Veterans' Affairs Programs) Ricardian Model of International Trade keyword: Dornbush–Fisher–Samuelson Ricardian model Hierarchic needs Hierarchic purchases Nonhomothetic preferences North–south trade O11 Technology and trade Dornbush–Fisher–Samuelson Ricardian model Hierarchic needs Hierarchic purchases Nonhomothetic preferences North–south trade O11 Technology and trade ab: Abstract: The paper proposes a theoretical model investigating the welfare consequences of technological shocks in a Ricardian framework (a la Dornbush, Fisher and Samuelson, 1977). Contrary to the existing literature, the model incorporates a nonhomothetic demand function whose price and income elasticities are endogenously determined by technology. Nonhomothetic preferences are modeled as the result of the hierarchical consumption of luxury and necessity goods. The nature of technical progress determines the consumption pattern and notably the magnitude of the substitution effect between necessities and luxuries. The model is applied to the case of trade between two economies with different development levels. It is shown in particular that the developing country can suffer a fall in utility as a result of technical progress in the developed country biased towards luxury goods. This configuration depends on the size of the development gap and reflects the fact that Southern goods are less attractive, the higher the range of goods consumed. This result suggests that there is an optimal level of development gap to avoid LDCs being harmed by technical progress in the North. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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