One-Sector Global Growth Models with Capital Accumulation

We analyze trade issues within the framework of a simple international macroeconomic growth model with perfect capital mobility. Most aspects of production sectors in our model are similar to the neoclassical onesector growth model. It is assumed that there is only one (durable) good in the global economy under consideration. Households own assets of the economy and distribute their incomes to consume and save. Our model, as far as trade and global growth are concerned, is influenced by the neoclassical trade theory with capital accumulation. Section 7.1 discusses the nature of the economic relations between the advanced and less developed regions of the world economy, or the North and South as it has become customary to call refer to them. The formal framework, initiated by Findlay (1980), is a synthesis of Solow-Swan’s neoclassical growth model (for the North), Lewis’s dual-economic model (for the South), and Johnson’s trade model as a linkage between the North and the South. Section 7.2 builds a dynamic one-commodity and two-country trade model to examine interdependence between trades and global growth. We analyze trade issues within the framework of a simple international macroeconomic growth model with perfect capital mobility. Section 7.3 extends the model in Sect. 7.2, introducing a few new features to the analytical framework. We construct a dynamic one-commodity and multiple-country trade model to examine interdependence between trade and global growth with sexual division of labor. The section proposes the multi-country model with endogenous labor supply, sexual division of labor, and capital accumulation.