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Growth Due to Globalization

Fernando Perera-Tallo
International Economic Review
Vol. 44, No. 2 (May, 2003), pp. 651-676
Stable URL: http://www.jstor.org/stable/3663482
Page Count: 26
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Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Growth Due to Globalization
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Abstract

This article presents a growth model including geographical space and transportation costs in which the geographical area where firms sell their product is endogenous. Growth is generated by the expansion of trade and there is a positive relationship between degree of openness and income level. The model explains why economies become increasingly more open and why the degree of openness is not robustly correlated with growth. In contrast to other growth models, investment in transport infrastructure plays an important role and the size of the country does not affect growth.

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