A genetic game of trade, growth and externalities

Cataloged from PDF version of article.A genetic algorithm is introduced to search for optimal policies in the presence of knowledge spillovers and local pollution in a dynamic North/South trade game. Noncooperative trade compounds inefficiencies stemming from externalities. Cooperative trade policies are efficient and yet not credible. Short of a joint maximization of the global welfare, transfer of knowledge remains as a viable route to improve world welfare. (C) 1998 Elsevier Science B.V. All rights reserved