Global Growth, Trade, and Economic Structures

Abstract

This chapter is concerned with dynamic relations between growth, economic structure and trade patterns in a two-country world economy. The model is similar to the two- country, two-good, two factor neoclassical trade. This chapter classifies national product into commodities and services. It is assumed that each country supplies and consumes both commodities and services. We hold that it is significant to classify national product into domestic services and international goods. The issues, for instance, about possible impact of changes of one country’s preferences for its services on the long-run world economic structure cannot be analyzed within the one- commodity framework.