1. |
- Accinelli, Elvio, et al.
(författare)
-
Free Mobility of Capital and Labor Force in a Two-Country Model: The Dynamic Game” for Growth
- 2019
-
Ingår i: The Journal of Dynamics and Games. - : American Institute of Mathematical Sciences (AIMS). - 2164-6066 .- 2164-6074. ; 6:3, s. 179-194
-
Tidskriftsartikel (refereegranskat)abstract
- In this paper, we consider a two-country and two-sector economy, where firms can choose to be innovative or not innovative, and workers to be skilled or unskilled. Using a dynamic game, we argue that exploiting the comparative advantages a country has in producing goods that use the most abundant factor of production, free mobility of capital and labour is beneficial for economic growth. However, if a country has a comparative advantage in a sector that uses intensely unskilled labour (which is the case of several underdeveloped economies), a poverty trap may arise. For this reason we argue that national Governments must ensure the technological development to improve competitiveness and therefore a social optimal use of the comparative advantages.
|
|