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In search of scale effects in trade and growth

Year: 1992

Type: article

Abstract: We look for the scale effects predicted by some theories of trade and growth based on the dynamic returns to scale that arise from learning by doing, investment in human capital, or development of new products. We find little empirical evidence of a relation between the growth rate of GDP per capita and the measures of scale implied by the theory. Restricting attention to the manufacturing sector, however, we find a significant relation between the growth rate of output per worker and the relevant scale variables. We also find that growth rates are significantly related to measures of intra-industry trade.

Source: Journal of Economic Theory

DOI: 10.1016/0022-0531(92)90060-u

Authors: David K Backus, Patrick J Kehoe, Timothy J Kehoe

Institutions: New York University, Federal Reserve Bank of Minneapolis, University of Pennsylvania, University of Minnesota

Language: English

Topic: Global trade and economics

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $3,030