DOI:
https://doi.org/10.31063/AlterEconomics/2023.20-2.2
For citation:
Zolotukhin, A. A. (2023). International Trade Model in the Labour Growth Theory. AlterEconomics, 20(2), 309–328. https://doi.org/10.31063/AlterEconomics/2023.20-2.2
Abstract:
The neoclassical growth model assumes that equilibrium growth is exogenous, which some researchers consider a disadvantage. In response, the endogenous growth theory emphasizes the endogenous determination of technical progress as the primary source of growth. The labor growth theory is a type of endogenous growth theory that is based on the labour theory of value. However, existing labour growth models only deal with closed economies, which is a significant limitation. This article aims to explore the impact of international trade on economic growth within the labour growth theory. It is assumed that trade can lead to specialization and productivity growth, which can increase the rate of economic growth and promote further trade expansion. There is also a positive feedback loop between economic growth and trade. The article discusses the difference between equivalent and mutually beneficial exchange and presents two models: one with linear growth and the other with exponential attenuation. The model without technological change predicts that the economy will eventually converge to a steady state with zero per capita growth. However, the second model is considered more realistic. Empirical verification of the models is also conducted.
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