Both of the modeling approaches summarised above can be calibrated on a multivariate basis to yield more sophisticated tools. The ultimate goal is to estimate what would happen to either total employment or total income if export activity were to change in the future. Given the widespread growth of interest in exports among firms of all types, such models are likely to attract increasing attention among policymakers in the near future. 10 popular reasons. Exposure to international markets prompts innovation to maintain competitiveness.
Exports provide a cushion against downswings in domestic demand.
Export capability implies that the firm can target growing markets, rather than rely upon home customers. Neoclassical Growth Models. The critical assumptions in this model are that workers are free to move wherever they want, and that investors can move capital to wherever they want. Factor markets will adjust to these movements by geographically equalising wage rates and investment yields. Polarised Growth Models.