Growth Gains from Trade and Education

March 1, 1999

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Format: Chicago

Yong-jin Kim, and Se-Jik Kim. Growth Gains from Trade and Education, (USA: International Monetary Fund, 1999) accessed September 19, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper presents a multisector growth model where education enhances general human capital, which is essential for increasing or maintaining the mobility of workers across industries. The paper shows that education, combined with international trade, can affect growth positively in the long run by raising workers’ ability to adapt and move easily to industries with the greatest productivity in each period. Depending on the initial ratio of general-to-specific human capital stock, multiple equilibrium growth paths can exist, including a poverty trap. If the ratio is not substantially low, trade liberalization can allow an economy in a poverty trap to transform into one with continuous education and higher output growth.

Subject: Education, Human capital, International trade, Labor, Labor supply, Technological innovation, Technology, Trade liberalization

Keywords: Autarky economy, Capital accumulation, East Asia, General education, Growth, Human capital, International trade, Labor supply, Mobility, Model economy, Open economy, Poverty trap, Sunk cost, Technological innovation, Th commodity, Trade liberalization, Utility function, WP

Publication Details

Pages:

30
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1999/023
Stock No:

WPIEA0231999
ISBN:

9781451844023
ISSN:

1018-5941

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