Economic growth (expansion of a country's production capabilities) results from increases in the country's endowments of factors of production or from technological improvements. Balanced growth shifts the country's production-possibility curve outward in a proportionate manner. If the product price ratio is unchanged, production of each product increases proportionately. Consumption of both products also increases. This alters the country's trade triangle and its willingness to trade unless the increases in quantities produced and consumed are equal. For instance, if the growth in production quantity of the exportable product exceeds the growth in its consumption quanity, then the trade triangle and the willingness to trade increase.

Biased growth shifts the ppc outward in a manner that is skewed toward one product. If the product price ratio is unchanged, production of this product expands, but production of the other product increases by a lesser proportion, stays the same, or declines. The Rybczynski theorem states that a kind of very biased growth, in which the endowment of only one factor is growing, results in a decrease in production by the sector that is not intensive in the growing factor. The Dutch disease is a real-world example. In the Dutch case the endowment growth was the discovery of natural gas deposits. Shifting labor and capital to the extraction of this gas led to a decline in the country's manufacturing sector.

If growth is biased toward producing more of the import-competing product, the country's trade triangle and its willingness to trade tend to shrink. If growth is biased toward producing more of the exportable product, the country's trade triangle and its willingness to trade tend to expand.

The trade of a small country has no impact on international prices. The analysis of growth in a small country is straightforward because its growth does not alter its terms of trade.

The trade of a large country does have an impact on international prices. If growth results in a large country becoming less willing to trade, then the relative price of the country's export product increases. In this case, growth benefits the country both by expanding its production capabilities and by improving its terms of trade.

If growth results in a large country becoming more willing to trade, then the relative price of its export product decreases. This deterioration in the terms of trade reduces the benefits to the country of growing productive capabilities. Indeed, it is possible that, if the terms of trade decline substantially, the country could be worse off after growing—a possibility called immiserizing growth.

The relationship of technology to the shape of the ppc indicates that differences in technology between countries can be a basis for trade. In some ways, this technology explanation competes with the Heckscher-Ohlin theory. The technology explanation of trade is that countries export products in which they have relative technology advantages. In other ways, technology differences can be linked to H-O. For instance, the research and development that leads to new technologies tends to be located in countries that are well endowed with the highly skilled labor (e.g., scientists and engineers) that is needed to conduct the R&D. The product cycle hypothesis is an attempt to offer a dynamic theory of technology and trade by emphasizing that the location of production of a product is likely to shift from the leading developed countries to developing countries as the product moves from its introduction to maturity and standardization.

Openness to international trade can also influence the rate of economic growth by affecting the rate at which the country's production technology is improving. With international openness, diffusion of new foreign technology into the country increases, because of imports of capital goods that embody the foreign technology, or licensing or imitation of the foreign technology. Innovation by domestic firms increases, because of competitive pressure and the greater returns available through foreign sales. Empirically, there is a significant positive relationship between the international openness of a country and the economic growth rate of that country.