2010 Fiscal Year Final Research Report

North-South Asymmetry in Returns to Scale, Uneven Development, and the Population Puzzle

Research Project

Project/Area Number	21730182
Research Category	Grant-in-Aid for Young Scientists (B)
Allocation Type	Single-year Grants
Research Field	Applied economics
Research Institution	Kyoto University (2010) Tohoku University (2009)
Principal Investigator	SASAKI Hiroaki Kyoto University, 経済学研究科, 准教授 (70534840)
Project Period (FY)	2009 – 2010
Keywords	南北貿易 / 経済発展 / 動学理論
Research Abstract	This research develops a model of North-South trade and economic development. The model is consistent with two empirical facts : (1) the growth rate of income per capita differs across countries ; and (2) the relationship between the growth of population and that of income per capita differs for developed and developing countries. We assume that the North and the South are characterized by increasing-returns-to-scale and decreasing-returns-to-scale technologies, respectively. Real national income grows at the same rate in both countries along the balanced growth path owing to a terms of trade effect. However, real income per capita grows at different rates because of population growth differentials. In developed countries, the correlation between population growth and income {\it per capita} growth can be positive or negative while in developing countries, the correlation is negative.