Essays on international trade, growth and technology transfer

The first paper develops a two sector overlapping generations model with endogenous growth and applies it to the analysis of international trade. It shows that the world trading system may not have a unique steady state equilibrium and so a small change in a country's capital stock in one period can have large effects on the capital stock and trading position of the country in subsequent periods. It also shows that depending on the ability of different countries to use the 'knowledge' or 'technical ability' of other countries, international trade will either cause a divergence or a convergence in world growth rates. The second paper develops a one sector overlapping generations model which exhibits the property of endogenous growth as well as the traditional property of multiple steady state equilibria. Consequently these multiple steady states will each have different rates of growth. The paper then proceeds to look at the problem of asset bubbles and shows that, if there is a unique bubbleless steady state equilibrium, there may exist an asymptotically bubbly steady state equilibrium, which will have a lower growth rate than the bubbleless steady state equilibrium. Thus the creation of a bubble will increase the utility of the existing generations at the expense of future generations. The third paper works in a Ricardian general equilibrium framework and shows that a technologically advanced country will prefer to transfer some of its technological superiority to a less efficient country, rather than keep all of its productive advantage.