The paper considers an extension of the Flam and Helpman model of North-South trade in which the government of South organizes and pays for R&D activity to reduce the production cost of quality-differentiated products. The main conclusions are the following: South has a welfare incentive to...

This paper studies the effects of labor supply on relative wages in a dynamic North-South model of trade. <link rid="b7">Lai (1995</link>)-a generalization of the <link rid="b3 b4">Grossman and Helpman (1991a,b</link>, ch. 11) models-showed that the relative wage of skilled (unskilled) labor in a region is positively (negatively) related to...

This paper analyses the local stability of the steady state of the generalized Lai (1995) model, i.e. the Shimizu and Okamoto (2004) model. Lai is a modified version of Grossman and Helpman (1991a, 1991b: Ch. 11) by assuming that there are two types of labour: skilled and unskilled labours....