A GENETIC GAME OF TRADE, GROWTH AND EXTERNALITIES

A genetic algorithm is introduced to search for optimal policies in th e presence of knowledge spillovers and local pollution in a dynamic No rth/South trade game. Noncooperative trade compounds inefficiencies st emming from externalities. Cooperative trade policies are efficient an d yet not credible. Short of a joint maximization of the global welfar e, transfer of knowledge remains as a viable route to improve world we lfare. (C) 1998 Elsevier Science B.V. All rights reserved.