Essays on trade and development

This dissertation contains three essays on the relation between trade and some dimensions of development. The first essay is on the impact of trade on a country\u27s population growth. We assume that women who work in the manufacturing sector face a higher time cost and hence demand a smaller number of children than women working in the agricultural or the informal sector. Developing countries which have a comparative advantage in labor intensive manufactures will experience an increase in the demand for labor in the manufacturing sector with trade. Some women who would otherwise be working in the agricultural or the informal sector will shift to the manufacturing sector and their demand for children is lower as a result. Therefore, trade causes the developing country\u27s fertility to fall. In the second essay, we construct a North-South model with endogenous long-run growth generated by learning by doing. We show that if South imports capital goods from and exports consumption goods to North, there exist balanced growth paths where the common growth rates of the two economies are higher than under autarky, even if learning in the capital good sector is higher than the consumption good sector. South grows faster because cheaper capital goods allow a higher output to be achieved in the traded consumption good sector thus enhancing learning there. North grows faster because resources are reallocated from low to high learning sector. We also show that the growth rate of the two economies can increase with trade if South exports labor intensive goods and imports capital intensive goods from North. The third essay analyzes the effect of trade policies on the technological search efforts of firms. We show that protection raises the opportunity cost as well as the benefits from greater search efforts by raising the demand faced by the domestic firm. The net impact of protection depends on the level and type of protection, market size, and market power of foreign firms. Export subsidy raises search effort of firms when initial export level is small while a subsidy-cum-export target scheme always increases search effort