scholarly journals Terms of trade, capital accumulation and the macro-economy in a developing country: a theoretical analysis

2013 ◽  
Vol 115 (3) ◽  
pp. 157-165
Author(s):  
Jonaki Sengupta ◽  
Ranjanendra Narayan Nag ◽  
Bhaskar Goswami
Keyword(s):  
Theoretical Analysis ◽  
Developing Country ◽  
Capital Accumulation ◽  
Terms Of Trade

scholarly journals Will the AI Revolution Cause a Great Divergence?

2020 ◽  
Vol 20 (184) ◽  
Author(s):  
Cristian Alonso ◽  
Andrew Berg ◽  
Siddharth Kothari ◽  
Chris Papageorgiou ◽  
Sidra Rehman
Keyword(s):  
Developing Country ◽  
Distinct Type ◽  
Fundamental Difference ◽  
Terms Of Trade ◽  
Extended Model ◽  
New Wave ◽  
Unskilled Labor ◽  
Great Divergence ◽  
Increase In Productivity ◽  
Set Up

This paper considers the implications for developing countries of a new wave of technological change that substitutes pervasively for labor. It makes simple and plausible assumptions: the AI revolution can be modeled as an increase in productivity of a distinct type of capital that substitutes closely with labor; and the only fundamental difference between the advanced and developing country is the level of TFP. This set-up is minimalist, but the resulting conclusions are powerful: improvements in the productivity of “robots” drive divergence, as advanced countries differentially benefit from their initially higher robot intensity, driven by their endogenously higher wages and stock of complementary traditional capital. In addition, capital—if internationally mobile—is pulled “uphill”, resulting in a transitional GDP decline in the developing country. In an extended model where robots substitute only for unskilled labor, the terms of trade, and hence GDP, may decline permanently for the country relatively well-endowed in unskilled labor.

scholarly journals Terms-of-trade and counterterrorism externalities

2019 ◽  
Author(s):  
Subhayu Bandyopadhyay ◽  
Todd Sandler ◽  
Javed Younas
Keyword(s):  
Developing Country ◽  
Free Trade ◽  
Terms Of Trade ◽  
Terrorist Group ◽  
Small Country ◽  
Developed Country ◽  
Developing Nation ◽  
Country Level ◽  
Terrorist Organization

Abstract This article investigates the interplay of trade and terrorism externalities under free trade between a developed nation that exports a manufactured good to and imports a primary product from a developing nation. A terrorist organization targets both nations and reduces its attacks in response to a nation’s defensive counterterrorism efforts, while transferring some of its attacks abroad. Terms-of-trade considerations lead the developed nation to raise its counterterrorism level beyond the ‘small-country’ level, thus compounding its overprovision of these measures. By contrast, the developing nation limits its defensive countermeasures below that of the small-country level. This asymmetry is a novel finding. The analysis is extended to include proactive countermeasures to weaken the terrorist group. Again, the developed country raises its efforts owing to the terms-of-trade externality, which now opposes the underprovision associated with proactive efforts. A second extension allows for several developing-country exporters of the primary product.

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