The role of specialisation within different theoretical approaches to trade and growth

This chapter highlights the role played by the composition of countries’ activities across sectors on international competitiveness and growth within different streams of literature. We argue that in the neoclassical growth theory neither the opening up of trade nor different patterns of specialisation can play a role in affecting countries’ rates of growth. On the contrary, in the new growth and trade theory, in post-Keynesian and in Schumpeterian-evolutionary models there are mechanisms that allow trade and specialisation to affect countries long-term performance. The purpose of this chapter is to highlight these mechanisms.