【正文】
nation’s volume of trade at constant price, then the nation’s TOT tend to deteriorate [di39。tiri?reit]惡化 . On the other hand, if growth reduce the nation’s volume of trade at constant price, then the nation’s TOT tend to improve. ? Wealth effect Refers to the change in the output per worker or per person as a result of growth. 2020/9/15 19 Growth and Trade: The LargeCountry Case (1) 2020/9/15 20 Growth and Trade: The LargeCountry Case (2) 2020/9/15 21 Immiserizing Growth (1) ? Even if the wealth effect, by itself, tends to increase the nation’s welfare, the TOT may deteriorate so much as to lead to a decline in the nation’s welfare. ? Immiserizing growth happens when: (a) growth increases export。 (b) large country。 (c) the ine elasticity for export is very low。 (d) heavily dependent on trade. 2020/9/15 22 Immiserizing Growth (2) 2020/9/15 23 Illustration of Beneficial Growth and Trade (1) 2020/9/15 24 Illustration of Beneficial Growth and Trade (2) 2020/9/15 25 Growth and Trade: The LargeCountry Case (Conclusions) TOT effect Wealth effect Nation’s welfare L double K double Labundant country