This thesis focuses on three issues pertaining to growth, development, and trade between developed and developing countries. The first essay develops an endogenous growth model that incorporates Engel’s law into the preferences. The model shows that the initial distribution of income is crucial to the outcome. A closed-economy country where most of its population is poor experiences a low rate of innovation. Income transfers from the rich to the poor can increase the effective labour supply, thereby enhancing the rate of innovation. Under free trade, only the rich benefit from trade. The poor are indifferent unless they already can afford to consume the minimum requirement of food before trade or the minimum requirement becomes affordable after trade by cheaper imported food. The initial distribution of income influences the trade patterns. Moreover, income redistribution in a free trade environment also increases the growth rate. The second essay extends the first one by assuming that the marginal product of labour of the food sector is decreasing. It shows that an increase in population may decrease the growth rate if the initial population is large relative to the productivity of the food sector. Moreover, an increase in one country’s population may reduce that country’s production share of the world’s innovation and increase its dependency on imported technology. The last essay analyzes the welfare impact of minimum-export requirements (MERs) imposed on foreign direct investments. This essay shows that MERs can be Pareto improving measures to both the source and the host countries. When offshore plants are used by parent firms to compete with domestic firms in the source country, MERs can improve the host country’s welfare by inducing the total sales in the source country to rise, thereby reducing the distortion generated by imperfect competition. The MERs can simultaneously improve the welfare of the host country by shifting profits of the foreign firms toward the local firms. If the local firms are absent, the host’s welfare may still be improved if sufficient profits from foreign operations are retained in the host country.

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This thesis focuses on three issues pertaining to growth, development, and trade between developed and developing countries. The first essay develops an endogenous growth model that incorporates Engel’s law into the preferences. The model shows that the initial distribution of income is crucial to the outcome. A closed-economy country where most of its population is poor experiences a low rate of innovation. Income transfers from the rich to the poor can increase the effective labour supply, thereby enhancing the rate of innovation. Under free trade, only the rich benefit from trade. The poor are indifferent unless they already can afford to consume the minimum requirement of food before trade or the minimum requirement becomes affordable after trade by cheaper imported food. The initial distribution of income influences the trade patterns. Moreover, income redistribution in a free trade environment also increases the growth rate. The second essay extends the first one by assuming that the marginal product of labour of the food sector is decreasing. It shows that an increase in population may decrease the growth rate if the initial population is large relative to the productivity of the food sector. Moreover, an increase in one country’s population may reduce that country’s production share of the world’s innovation and increase its dependency on imported technology. The last essay analyzes the welfare impact of minimum-export requirements (MERs) imposed on foreign direct investments. This essay shows that MERs can be Pareto improving measures to both the source and the host countries. When offshore plants are used by parent firms to compete with domestic firms in the source country, MERs can improve the host country’s welfare by inducing the total sales in the source country to rise, thereby reducing the distortion generated by imperfect competition. The MERs can simultaneously improve the welfare of the host country by shifting profits of the foreign firms toward the local firms. If the local firms are absent, the host’s welfare may still be improved if sufficient profits from foreign operations are retained in the host country. / Arts, Faculty of / Vancouver School of Economics / Graduate

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M.Com. (Economics) / Please refer to full text to view abstract

Typescript (photocopy). / Digitized by Kansas Correctional Industries

¡§¡Kcommerce and manufactures gradually introduced order and good government and with them, the liberty and security of individuals, among the inhabitants of the country, who had before lived in a continual state of war with their neighbors, and of servile dependency upon their superiors. This though the least observe is by far the most important of all their effects.¡¨ Adam Smith in his classic ¡§Wealth of Nations¡¨ amply sets the tone of this paper on China-ASEAN relations. Significant domestic developments in individual Southeast Asian states have brought about new political, economic and social challenges that necessarily impact on the stability of the entire region. In general, Southeast Asia remains beset with widening economic and social inequities, unresolved political conflicts as well as growing ethnic tensions, compounded by threats of terrorism and other transnational crimes. At the same time, however, Southeast Asian nations have moved toward greater cooperation under the ASEAN. The researcher¡¦s motivation for undertaking this research topic is due to the fact that China-ASEAN economic relations is an area of considerable yet remains poorly understood, it was very fitting for her to embark into a study that will take a closer look of the evolving relations and implications to the Philippines since the researcher is a citizen of the country which is an original charter member of the ASEAN. The study was an assessment of the China-ASEAN cooperation and its implications to the Philippines. The paper is preceded by a hypothesis that¡X¡§The better the level of relationship is between China and the ASEAN as a regional block, the better the chances for China and the Philippines to enhance not only its traditional relationship in bilateral trade and investments, but also the more contentious issue of amicably resolving the South China Sea conflict, more specifically, the Kalayaan Group of Islands or Spratlys.¡¨ The researcher used both descriptive and analytical approach for the study. The three data sources of the study were document analyses, interview of key informants and focused group discussions. The inputs were taken from the results of the document analyses and the interview of key informants. The China-ASEAN relations are characterized as economic cooperation at first hand. Such relationship has evolved through the years from economic to other non-traditional areas of cooperation like security and conflict resolutions. Joint agreements are signed between ASEAN member states and China with regard to increased trade and settlement of political issues and disputes. The Philippines as a member state was able to optimize its gains in the China-ASEAN relations with the increase in bilateral trade and investments. Undoubtedly the subsequent deepening of engagement between China and the Philippines is mutually beneficial to the two countries national interests.

Diss.--Universität München, 2009. / Includes bibliographical references.

Title from PDF of title page (University of Missouri--Columbia, viewed on Feb. 15, 2010 ). The entire thesis text is included in the research.pdf file; the official abstract appears in the short.pdf file; a non-technical public abstract appears in the public.pdf file. Dissertation advisor: Dr. A. Cooper Drury. Vita. Includes bibliographical references.

This thesis examines the interaction between real and financial decisions in a two-country world economy. To understand this interaction, we develop two-country general equilibrium multi-period models of pure exchange and production economies. We model the real decisions of consumption and investment choice and the financial decisions of portfolio choice explicitly under various degrees of financial market integration. In addition, we allow the governments to act strategically in making their policy choice regarding the degree of integration in the international goods and financial markets. Therefore, our models allow us to examine the effect of the interaction between real and financial decisions on policy choice in the goods and financial markets. The main results in the thesis are presented in Chapters 3, 4 and 5. We first analyse how the optimal tariff decision may vary under different financial market structures. In order to do so, we determine the government's choice of tariff level using a two-good general equilibrium framework where the financial structure in the economy is explicitly modelled. We find that the extent to which of financial markets are integrated affects trade policy decisions in the commodity markets. Specifically, we find an inverse relationship between the Nash equilibrium tariff level and the degree of international financial market integration. The intuition underlying this result is as follows. In our model, the government uses tariffs to cause a favourable change in the terms of trade. However, in the presence of financial markets, households can hedge endowment risks and the change in the terms of trade by using financial contracts. Thus, the favourable terms of trade effect (which is the motivation for a tariff in our model) associated with a tariff levy is reduced with increasing degrees of financial integration. Given the influence of financial market structure on endogenous trade policy, we then characterise and numerically compute the welfare gains from financial market integration. We identify the welfare gains from two sources. The direct source is the gain from risk-sharing in the financial markets. The second source is the gain from free trade in the commodity market that results from a government's tariff game in the presence of complete financial integration. We find that the magnitude of the welfare gain due to free trade is substantially greater than that due to increased risk-sharing capabilities under a reasonable calibration of our world economy. Thus far, we have assumed the financial market segmentation in the economy to be exogenous and our results suggest that the existing financial market structure has important repercussions in the-commodity markets. In the third part of our analysis, we analyse the government's choice of financial market structure. To do this, we examine the equilibrium policy choice of financial market segmentation in the absence of trade policy. That is, under what conditions will a country find it optimal to limit access to its own or foreign capital markets? Our results suggest that in the special case in which the production technology exhibits constant returns to scale in capital, each country may choose to deny foreign access to its domestic stock market. In general however, we find that complete financial market integration will be the optimal choice for both countries. Our main finding is that there are strong interactions between financial markets and goods markets. Consequently, the optimal tariff level can be very different under different financial market structures. Also, the welfare impact of opening financial markets can be large, given the influence of financial market structure on endogenous tariffs in the goods markets. Finally in a production economy, the optimal financial market structure can be related to the nature of the production technology. Some policy recommendations follow from our work. First, the existing financial market structure in the economy should be considered in making the policy choice of a tariff level: the more integrated the financial markets, the lower the optimal tariffs. Second, the share of capital in a country's production technology is an important factor in the decision of the optimal financial market structure. When the production technology exhibits decreasing returns to scale in capital, the optimal financial structure is complete integration.