Sustainable effects of technological progress and trade liberalization

Yochanan Shachmurove and Uriel Spiegel

Economic Modelling, 2013, vol. 33, issue C, 956-964

Abstract: This paper examines the controversy involving international trade by employing a simple model. It analyzes the effects of unilateral technological improvements in one entity on the welfare of that entity and its trading partners. Improvements in one country are irreversible and lead to substantial welfare effects on its trading partner. The result reveals some unpleasant free trade arithmetic. However, the results do not suggest that the trade should be curtailed. Rather, the paper advocates a critical need to allocate additional resources in order to maintain their competitive edge in an era when economies are becoming increasingly integrated.

Keywords: International trade; Samuelson; Gainers and losers from trade; Technological improvements; Concealed technological improvements; Pareto improvements in production and consumption; Nash bargaining process; Sleeping patents; Rest of the world; Terms of trade; Distributive justice; China; United States (search for similar items in EconPapers)
JEL-codes: D51 F0 F1 O O1 O3 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:33:y:2013:i:c:p:956-964

DOI: 10.1016/j.econmod.2013.06.014

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