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Some results from a model of trade, aid and development in South

Chichilnisky, Graciela (1978): Some results from a model of trade, aid and development in South. Published in: Issues and Analysis of Long Term Development, Proceedings of Seminar at the Institute of Development (1981): pp. 96-112.

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In this paper I describe certain results that were obtained in the UNITAR project based on a model I have specified for studying the relationship between international terms of trade and domestic income distributions of the exporting countries within the South. In particular, I shall concentrate on those countries that have certain characteristics that distinguish the situation of the underdeveloped world today. I shall discuss the implications of these results about the question of the transmission of the growth from the North to the South through international markets, both through trade and through aid. The results are of crucial importance to a proper discussion of the scenarios outline in the two previous papers.

In particular, I shall present a set of results that contradict the statement that he growth of the North is necessary or even at all favorable to the growth of the South, which is central to much thinking about the New International Economy Order. I shall also briefly discuss the relation of these results with the more orthodox Stolper-Samuelson factor of price equalization theory.

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