Export promotion, learning by doing and growth

✍ Scribed by Steve Ambler; Emanuela Cardia; Jeannine Farazli

• Publisher: Elsevier Science
• Year: 1999
• Tongue: English
• Weight: 268 KB
• Volume: 23
• Category: Article
• ISSN: 0165-1889
• DOI: 10.1016/s0165-1889(98)00042-6

✦ Synopsis

This paper explores the quantitative link between export-promoting commercial policies and economic growth. We build and calibrate a dynamic general equilibrium model of a small developing economy. The economy's equilibrium is suboptimal due to monopolistic competition in the manufacturing sector and a human capital accumulation externality. Second-best commercial policy that promotes exports in the sector with the externality can lead to an increase in both welfare and growth rates. We show that export-promoting policies can lead to substantial quantitative increases in steady-state growth for a wide range of parameter values.