ABSTRACT
As discussed in the previous chapter, when technology does not movereadily between countries then there are circumstances under whichtrade restrictions can enhance economic growth. There are many reasons why knowledge may not instantaneously or costlessly transfer from one economy to another. The evidence that the adoption of new ideas and knowledge follows the pattern of an S-curve even within a single country suggests that knowledge, ideas, techniques, and methods are unlikely to move instantaneously between countries. On the other hand, the quote by Plutarch reminds us that ideas and technology has often moved between countries. The quote further suggests that ideas and technology can move right along with goods and services. If ideas indeed move along with goods, then those special cases in which trade restrictions actually promote technological progress and economic growth are unlikely to occur. The Schumpeterian model in Chapter 6 suggested that if international trade causes knowledge to move more easily between countries, then trade would reduce the cost of innovation. And, if trade makes it easier to innovate, then open economies will tend to grow faster than closed economies.
