Abstract
In the Presidential address to the Royal Economic Society (1976), Nicholas Kaldor presented an informal model of the world economy. On this Kaldorian line, this paper presents a North-South growth model. It has been observed that there is no relationship between the monopoly power of the Northern capitalists and the North-South terms of trade. Technical progress in the South has a declining impact on the Southern terms of trade while technical progress in the North does not have a similar impact on the Northern terms of trade. Furthermore, this model shows that the South as a whole cannot speed up its long-term growth rate through export promotion; rather it faces a terms of trade loss.
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