Factor Accumulation and the Terms of Trade: Applications to the Asian Financial Crisis
This paper investigates the effects of population growth and capital accumulation on trade and welfare. In the absence of a terms of trade effect, an population increase reduces the standard of living and causes a reduction in welfare. An increase in population causes deterioration in the terms of trade of a labour abundant country, whereas capital accumulation improves them, regardless of the source of growth. Moreover, an increase in the Southï¾’s population is immiserizing.
Year of publication: |
2006-01-01
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Authors: | Choi, E. Kwan ; Beladi, Hamid |
Institutions: | Department of Economics, Iowa State University |
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