INTERNATIONAL TRADE AND INDUSTRIALIZATION WITH NEGATIVE POPULATION GROWTH

摘要

This paper builds a small-open-economy nonscale-growth model with negative population growth and investigates the relationship between trade patterns and per capita consumption growth. Under free trade, if the population growth rate is negative and its absolute value is small, the home country becomes an agricultural country. Then the long-run growth rate of per capita consumption is positive and depends on the world population growth rate. On the other hand, if the population growth rate is negative and its absolute value is large, the home country becomes a manufacturing country. Then the long-run growth rate of per capita consumption is positive and depends on both the home country and the world population growth rates. Moreover, the home country is better off under free trade than under autarky in terms of per capita consumption growth irrespective of whether the population growth is positive or negative.