TARIFFS AND SCHUMPETERIAN GROWTH

The paper develops a dynamic multi-country, multi-commodity model of S chumpeterian growth, trade, and tariffs. The presence of a nontraded f inal good sector generates differences in long-run growth across count ries. Furthermore, if the growth intensity of the nontraded good is lo wer than the growth intensity of traded goods, then the liberalization of trade raises the long-run growth of all trading partners. The pape r also analyzes the implications of multilateral, bilateral and unilat eral schemes of trade liberalization for long-run growth and welfare.