Trade and endogenous growth with Ricardo-Viner production technology

This paper derives three main results. First, learning by doing is sufficient to generate endogenous growth under Ricardo-Viner production technology. One implication of this result is that policy has a role when agents do not internalize the dynamic gains from learning. Second, trade is advantageous for a small country and in the case of domestic goods having low elasticity of substitution in final consumption, high human capital content and/or a high learning rate. Third, border distortions in the form of import tariffs can affect pattern of specialization and long-run growth but only for large economies and under very special circumstances.