VoxDev Development Economics S6 Ep45: Rethinking trade and development
Nov 12, 2025
In this discussion, Penny Goldberg, an economist at Yale known for her insights on trade's role in growth miracles, joins Michele Ruta from the IMF, who focuses on the implications of trade policies for developing countries. They explore why past trade-driven growth may not be replicable, diving into key factors like technology transfer, market access, and the evolution of global value chains. They also assess the impact of geopolitical shifts, rising industrial policies, and climate risks on future development prospects.
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Static Trade Gains Are Insufficient
- Static comparative-advantage channels alone cannot explain the fast growth miracles like Korea's 30-fold GDP per capita rise.
- Dynamic channels that change endowments, technology, and institutions drove those miracles.
Dynamic Channels Drove Structural Change
- Dynamic channels include market access, cross-border learning, technology transfer, and institutional change.
- These channels changed economic structure and powered the past export-led growth miracles.
Korea Example And GVC Learning
- Penny gives Korea as an example where human-capital investments were driven by trade-created demand and jobs.
- She also recounts firms' organic learning via global value chains requiring compatible parts and cross-border communication.