A Ricardian model of trade and growth with endogenous trade status

► A two-country, continuum-good Ricardian model of trade and endogenous growth. ► A permanent fall in the trade cost in any one country has the following effects. ► It raises the growth rates of capital in all countries for all periods. ► It increases both imported and exported varieties in all countries for all periods. ► It raises welfare in all countries.