TEL  Vol.2 No.5 , December 2012
The Effects of Opening Trade on Regional Inequality in a Model of Scale-Invariant Growth and Foot-Loose Capital
Author(s) Katsufumi Fukuda*
ABSTRACT
We consider a semi endogenous R & D growth model with international trade, foot-loose capital, and local and international knowledge spillovers in a closed economy and also international knowledge spillovers in an open economy. We show that by opening trade two regions diverge (converge) with (not) sufficiently high intertemporal knowledge spillover in the R & D sector and elasticity of substitution between modern goods, and not sufficiently high (sufficiently high) richer country A’s share of firm owned.

Cite this paper
K. Fukuda, "The Effects of Opening Trade on Regional Inequality in a Model of Scale-Invariant Growth and Foot-Loose Capital," Theoretical Economics Letters, Vol. 2 No. 5, 2012, pp. 423-430. doi: 10.4236/tel.2012.25078.
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