International Trade, Capital Flows and Economic Development Downloaded from www. For personal use only.indd 1 13/4/18 7:02 PM World Scientific Studies in International Economics (ISSN: 1793-3641) Series Editor Keith Maskus, University of Colorado, Boulder, USA Editorial Board Vinod K. Aggarwal, University of California-Berkeley, USA Alan Deardorff, University of Michigan, USA Paul De Grauwe, London School of Economics, UK Barry Eichengreen, University of California-Berkeley, USA Mitsuhiro Fukao, Keio University, Tokyo, Japan International Trade, Capital Flows and Economic Development Downloaded from www. Howse, New York University, USA Keith E.
Maskus, University of Colorado, USA Arvind Panagariya, Columbia University, USA World Scientific Studies in International Economics includes works dealing with the theory, empirical analysis, and evaluation of international economic policies and institutions, with by 24. For personal use only. topics covering international macroeconomics and finance, international trade theory and policy, as well as international legal and political economy. Monographs and edited volumes will comprise the core of the publications.
68 International Trade, Capital Flows and Economic Development edited by Francisco L. Rivera-Batiz (Columbia University, USA) & Luis A. Rivera-Batiz (University of Puerto Rico, USA) Vol.0: Trade and Innovation within Global Networks edited by Dieter Ernst (East-West Center, USA & The Centre for International Governance Innovation/CIGI, Canada) & Michael G. 66 International and Interregional Migration: Theory and Evidence edited by Francisco L.
Rivera-Batiz (Columbia University, USA) Vol. 65 International Trade Theory and Competitive Models: Features, Values, and Criticisms by Ronald W. 64 Information Spillovers and Market Integration in International Finance: Empirical Analyses by Suk-Joong Kim (University of Sydney, Australia) Vol. 63 Dimensions of Trade Policy by Martin Richardson (Australian National University, Australia) Vol.
62 International Trade and Labor Markets: Welfare, Inequality and Unemployment by Udo Kreickemeier (TU Dresden, Germany) Vol. 61 Achieving Financial Stability: Challenges to Prudential Regulation edited by Douglas D. Kaufman (formerly Loyola University Chicago, USA), Agnese Leonello (European Central Bank, Germany) & Simone Manganelli (European Central Bank, Germany) The complete list of the published volumes in the series can be found at http://www.com/series/wssie Yulin - 10431 - International Trade, Capital Flows.indd 1 20-04-18 10:08:41 AM International Trade, Capital Flows and Economic Development Downloaded from www. For personal use only.indd 2 World Scientific 13/4/18 7:02 PM Published by World Scientific Publishing Co.
5 Toh Tuck Link, Singapore 596224 USA office: 27 Warren Street, Suite 401-402, Hackensack, NJ 07601 UK office: 57 Shelton Street, Covent Garden, London WC2H 9HE International Trade, Capital Flows and Economic Development Downloaded from www.com Library of Congress Cataloging-in-Publication Data Names: Rivera-Batiz, Francisco L. | Rivera-Batiz, Luis, author. Title: International trade, capital flows and economic development / Francisco L. Rivera-Batiz (Columbia University, USA), Luis A.
Description: Hackensack, New Jersey : World Scientific Publishing Co., [2018] | Series: World Scientific studies in international economics ; volume 68 | Includes bibliographical references. For personal use only. Identifiers: LCCN 2018000482 | ISBN 9789813209381 (hardcover) Subjects: LCSH: International trade. | Income distribution--Social aspects.
Classification: LCC HF1379 .R578 2018 | DDC 330--dc23 LC record available at https://lccn.gov/2018000482 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library. Copyright © 2018 by World Scientific Publishing Co. All rights reserved. This book, or parts thereof, may not be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording or any information storage and retrieval system now known or to be invented, without written permission from the publisher.
For photocopying of material in this volume, please pay a copying fee through the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA. In this case permission to photocopy is not required from the publisher. For any available supplementary material, please visit http://www.1142/10431#t=suppl Desk Editor: Jiang Yulin Typeset by Stallion Press Email: enquiries@stallionpress.com Printed in Singapore Yulin - 10431 - International Trade, Capital Flows.indd 2 20-04-18 10:08:41 AM International Trade, Capital Flows and Economic Development Downloaded from www. For personal use only.
April 24, 2018 8:11 v International Trade, Capital Flows. In memory of Luis 9in x 6in b3183-fm page v b2530 International Strategic Relations and China’s National Security: World at the Crossroads International Trade, Capital Flows and Economic Development Downloaded from www.com This page intentionally left blank by 24. For personal use only.indd 6 01-Sep-16 11:03:06 AM April 24, 2018 8:11 International Trade, Capital Flows. 9in x 6in b3183-fm page vii International Trade, Capital Flows and Economic Development Downloaded from www.com Contents by 24.
For personal use only. About the Authors xv Acknowledgements xix List of Tables xxiii List of Figures xxv Introduction xxvii Part 1: International Trade, Technological Change and Economic Growth 1 1 Economic Integration and Endogenous Growth 3 1.2 Specification of the Models .3 Balanced Growth and Integration .4 Trade in Goods and Flows of Ideas .5 Scale Effects and Growth .6 Limitations of the Models and Extensions .8 Economic Integration and Endogenous Growth: An Addendum. 32 vii April 24, 2018 8:11 International Trade, Capital Flows. 9in x 6in b3183-fm page viii viii International Trade, Capital Flows and Economic Development 2 International Trade with Endogenous Technological Change 33 2.2 Scale, Allocation, and Redundancy .3 Specification of the Model.
41 International Trade, Capital Flows and Economic Development Downloaded from www.4 Across the Board Protection .5 Selective Protection with Imperfect Intellectual Property Rights. For personal use only. 3 GATT, Trade, and Growth 71 3.2 Growth Effects of Integration and Tariff Cuts .3 A General Model of Endogenous Growth .4 Integration and Reciprocal Tariff Reductions. 81 4 Integration among Unequals 83 4.2 A Two-Country Model of Technological Change and Growth .3 Integration between Unequal, Innovating Economies .4 Integration between Highly Asymmetric Countries.
103 5 The Economics of Technological Progress and Endogenous Growth in Open Economies 105 5.2 Endogenous Technological Change and Economic Growth. 109 April 24, 2018 8:11 International Trade, Capital Flows. 9in x 6in b3183-fm page ix Contents ix 5.3 Rivalry, Trade and Technological Change .4 Trade, Technological Change and Long-Run Growth .5 National Innovation Systems and Long-Run Economic Growth. 122 International Trade, Capital Flows and Economic Development Downloaded from www.6 The Impact of International Trade on Endogenous Growth .7 Summary and Conclusions.
135 Part 2: Trade, Increasing Returns and by 24. For personal use only. Economic Geography 139 6 Increasing Returns, Monopolistic Competition, and Agglomeration Economies in Consumption and Production 141 6.2 Specialization in Producer Services and Industrial Economies .3 The Supply of Producer Services: Diversity, Pricing and Output Decisions .4 Services, Variety and Agglomeration Economies in Consumption .5 Household Utility Differentials in a System of Closed Cities .6 Agglomeration Economies and the Equilibrium Allocation of Households among a System of Open Cities. 175 7 Geography, Trade Patterns, and Economic Policy 177 7.2 Models of Location, Agglomeration and Trade .3 A General Model of Interregional Trade.
187 April 24, 2018 8:11 International Trade, Capital Flows. 9in x 6in b3183-fm page x x International Trade, Capital Flows and Economic Development 7.4 The Geography of Employment, Agriculture and Pollution Externalities .5 Industrial Centers Servicing Widespread Heterogeneous Markets .6 The Gravity Theory of Trade Patterns. 197 International Trade, Capital Flows and Economic Development Downloaded from www.7 Patterns of Spatial Resource Allocation in Manufacturing and Agriculture .8 Technological Change, Transportation Efficiency and Externalities .9 Industrial Policy and Theory of Central Location. For personal use only.
209 Part 3: Public Sector Governance, Capital Flows and Economic Growth 213 8 Democracy, Governance, and Economic Growth: Theory and Evidence 215 8.2 The Linkages between Democracy and Governance .3 A Model of Democracy, Governance, and Endogenous Growth .4 The Empirical Evidence on Democracy and Growth. 245 9 Political Institutions, Capital Flows, and Developing Country Growth: An Empirical Investigation 249 9.2 Data and Exploratory Causality Tests. 252 April 24, 2018 8:11 International Trade, Capital Flows. 9in x 6in b3183-fm page xi Contents xi 9.3 Democracy, the Rule of Law, and Growth .4 Which Type of Capital Flow Has the Greater Growth Impact? .5 Do Better Democracies Attract More Capital Flows?.
265 International Trade, Capital Flows and Economic Development Downloaded from www. 269 10 International Financial Liberalization, Corruption, and Economic Growth 271 by 24. For personal use only.2 A Model of a Small Open Economy in the Presence of Corruption .3 The Impact of Capital Account Liberalization on Economic Growth. 285 11 The East Asian Crisis and the Anatomy of Emerging Market Disease 289 11.2 Patterns of Long-Run Growth in East Asia .3 Before the Typhoon: A Look at Some Key Macroeconomic Fundamentals .4 The Development of the Crisis .5 The Anatomy of an Emerging Market Crisis: Capital Inflows and the Exchange Rate .6 The Aftermath of the Crisis: Where Are We Now? .7 Policy Implications: The Political Economy of Emerging Market Disease.
336 April 24, 2018 8:11 International Trade, Capital Flows. 9in x 6in b3183-fm page xii xii International Trade, Capital Flows and Economic Development Part 4: The Effects of Foreign Direct Investment 343 12 Foreign Ownership, Non-Traded Goods and the Effects of Terms of Trade Changes on National Welfare 345 12. 345 International Trade, Capital Flows and Economic Development Downloaded from www.2 The Effects of Changes in Terms of Trade on National and Aggregate Welfare .3 Terms of Trade Changes, Non-Traded Goods Prices and Welfare. For personal use only.
13 Foreign Capital and the Contractionary Impact of Currency Devaluation, with an Application to Jamaica 353 13.3 Foreign Ownership and Exchange Rate Management .4 The Current Account, Export Taxes and the Effects of Devaluation on GDP .5 An Application to Jamaica and the Bauxite Industry. 369 14 The Effects of Direct Foreign Investment in the Presence of Increasing Returns due to Specialization 371 14.2 Producer Services and Increasing Returns due to Specialization .3 The Producer Services Market: Pricing and Output Decisions .4 Foreign Capital Inflows, External Economies of Scale and Industrial Growth .5 Foreign Capital and National Welfare .6 Foreign Investment, Specialization and Employment in LDCs. 389 April 24, 2018 8:11 International Trade, Capital Flows. 9in x 6in b3183-fm page xiii Contents xiii 14.
394 15 Europe 1992, and the Liberalization of Direct Investment Flows: Services versus Manufacturing 397 International Trade, Capital Flows and Economic Development Downloaded from www.2 The Industrial Sector and Specialization Economies .3 The Producer Services Sector .4 The Effects of Direct Foreign Investment. For personal use only. 409 b2530 International Strategic Relations and China’s National Security: World at the Crossroads International Trade, Capital Flows and Economic Development Downloaded from www.com This page intentionally left blank by 24. For personal use only.indd 6 01-Sep-16 11:03:06 AM April 24, 2018 8:11 International Trade, Capital Flows.
9in x 6in b3183-fm page xv International Trade, Capital Flows and Economic Development Downloaded from www.com About the Authors by 24. For personal use only. Rivera-Batiz Francisco L. Rivera-Batiz Francisco L.
Rivera-Batiz is a professor emeritus of economics and education at Columbia University where he remains teaching at the School of International and Public Affairs. At Columbia, he has had professorial appointments in the Economics Department, the School of International and Public Affairs and at Teachers College, and has been the Director of the Program in Economic Policy Management, the Latino Studies Program, and the Institute for Urban and Minority Education. Rivera-Batiz has also held teaching or research appointments at the University of Chicago, Harvard University, Indiana University at Bloomington, the University of Pennsylvania, Rutgers University in New Brunswick, and the University of Wisconsin at Madison. xv April 24, 2018 8:11 International Trade, Capital Flows.
9in x 6in b3183-fm page xvi xvi International Trade, Capital Flows and Economic Development Francisco has written and published extensively on topics relating to international economics, regional science, growth, labor migration and the economics of education. His articles have been published in leading academic journals such as The American Economic Review, International Economic Review, Journal of Development Economics, International Trade, Capital Flows and Economic Development Downloaded from www.com The Quarterly Journal of Economics, The Journal of Population Economics, and Regional Science and Urban Economics.