A two-final-good, one-primary-factor, small open endogenous growth model is constructed based on R&D. The model yields two steady states with different growth rates as potential equilibria. Depending on history and the external environment, the economy may fall into the poverty trap in free...

We formulate a two-country, two-good, two-factor, two-period-lived overlapping generations model to examine how population aging determines the pattern of and gains from trade. We obtain two main results. First, the aging country endogenously becomes a small country exporting the...

We formulate a two-country, continuum-good Ricardian model of trade and endogenous growth with endogenous trade status. After establishing the existence, uniqueness, and global stability of a balanced growth path, we show that, compared with the old balanced growth path, a permanent fall in the...