Economic growth is generally to be welcomed from the point of view of the welfare of a country. It is particularly so when the growth is due to the capital accumulation rather than the increase in the population. Similarly, international trade is generally considered to raise the level of welfare of a country, i.e., the gains from trade is expected. One plus one may not, however, always make two. It is possible that the combined effect of the economic growth and international trade is to decrease, rather than to increase, the welfare of a country. This possibility was first pointed out by Edgeworth  and then taken up again by Bhagwati  who called such an economic growth the immiserizing growth.
KeywordsInternational Trade Capital Stock Foreign Investment Free Trade Capital Accumulation
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