Hostname: page-component-cd9895bd7-gvvz8 Total loading time: 0 Render date: 2024-12-28T07:55:13.171Z Has data issue: false hasContentIssue false
  • English
  • Français

CAN TRANSITION DYNAMICS EXPLAIN THE INTERNATIONAL OUTPUT DATA?

Published online by Cambridge University Press:  01 September 2004

CHRIS PAPAGEORGIOU  and
FIDEL PEREZ-SEBASTIAN
CHRIS PAPAGEORGIOU
Affiliation:
Louisiana State University
FIDEL PEREZ-SEBASTIAN
Affiliation:
Universidad de Alicante
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper studies the transition dynamics predictions of an R&D-based growth model, and evaluates their performance in explaining income disparities across nations. We find that the fraction of the observed cross-country income variation explained by the transitional dynamics of the model is as large as the one accounted for by existing steady-state level regressions. Our results suggest that the traditional view of a world in which nations move along their distinct balanced-growth paths is as likely as the one in which countries move along adjustment paths toward a common (very long run) steady state.

Keywords

R&D-Based Growth ModelTransition DynamicsCross-Country Income DisparitiesInternational Output Data
Type
ARTICLES
Information
Macroeconomic Dynamics , Volume 8 , Issue 4 , September 2004 , pp. 466 - 492
Copyright
© 2004 Cambridge University Press

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Attanasio O. & G. Weber 1993 Consumption, the interest rate and aggregation. Review of Economic Studies 60, 631– 649.Google Scholar
Barro R.J. & J-W. Lee 2001 International data on educational attainment: Updates and implications. Oxford Economic Papers 53, 541– 563.Google Scholar
Barro R. & M. Sala-i-Martin 1995 Economic Growth. New York: McGraw-Hill.
Benhabib J. & M. Spiegel 1994 The role of human capital in economic development: Evidence from cross-country data. Journal of Monetary Economics 34, 143– 173.Google Scholar
Bils M. & P. Klenow 2000 Does schooling cause growth? American Economic Review 90, 1160– 1183.Google Scholar
Chari V.V., P. Kehoe & E. McGrattan 1997 The Poverty of Nations: A Quantitative Exploration. Federal Reserve of Minneapolis Staff Report 204.
Christiano L. 1989 Understanding Japan's saving rate: The reconstruction hypothesis. Federal Reserve of Minneapolis Quarterly Review 2, 10– 29.Google Scholar
Coe D. E. Helpman & A. Hoffmaister 1997 North-South R&D spillovers. Economic Journal 107, 134– 149.Google Scholar
Dinopoulos E. & P. Thompson 1998 Schumpeterian growth without scale effects. Journal of Economic Growth 3, 313– 335.Google Scholar
Dinopoulos E. & P. Thompson 2000 Endogenous growth in a cross-section of countries. Journal of International Economics 51, 335– 362.Google Scholar
Eicher T. & S. Turnovsky 1999a A generalized model of economic growth. Economic Journal 109, 394– 415.Google Scholar
Eicher T. & S. Turnovsky 1999b Convergence in a two-sector non-scale growth model. Journal of Economic Growth 4, 413– 429.Google Scholar
Eicher T. & S. Turnovsky 2001 Transition dynamics in non-scale models. Journal of Economic Dynamics and Control 25, 85– 113.Google Scholar
Findlay R. 1978 Relative backwardness, direct foreign investment and the transfer of technology: A simple dynamic model. Quarterly Journal of Economics 92, 1– 16.Google Scholar
Griliches Z. 1988 Productivity puzzles and R&D: Another nonexplanation. Journal of Economic Perspectives 2, 9– 21.Google Scholar
Guvenen M.F. 2002 Reconciling Conflicting Evidence on the Elasticity of Intertemporal Substitution: A Macroeconomic Perspective. University of Rochester, Department of Economics, working paper.
Hall R. 1988 Intertemporal substitution in consumption. Journal of Political Economy 96, 339– 357.Google Scholar
Howitt P. 2000 Endogenous growth and cross-country income differences. American Economic Review 90, 829– 846.Google Scholar
Jones C.I. 1995 R&D-based models of economic growth. Journal of Political Economy 103, 759– 784.Google Scholar
Jones C.I. 1997 Convergence revisited. Journal of Economic Growth 2, 131– 153.Google Scholar
Jones C.I. 2002 Sources of U.S. economic growth in a world of ideas. American Economic Review 92, 220– 239.Google Scholar
Jones C.I. & J. Williams 2000 Too much of a good thing: The economics of investment in R&D. Journal of Economic Growth 5, 65– 85.Google Scholar
Judd K. 1992 Projections methods for solving aggregate growth models. Journal of Economic Theory 58, 410– 452.Google Scholar
King R. & S. Rebelo 1993 Transitional dynamics and economic growth in the neoclassical model. American Economic Review 83, 908– 931.Google Scholar
Kortum S. 1993 Equilibrium R&D and the decline in the patent-R&D ratio: U.S. evidence. American Economic Review: Papers and Proceedings 83, 450– 457.Google Scholar
Krueger A. & M. Lindahl 2001 Education for growth: Why and for whom? Journal of Economic Literature 39, 1101– 1136.Google Scholar
Lloyd-Ellis H. & J. Roberts 2002 Twin engines of growth: Skills and technology as equal partners in balanced growth. Journal of Economic Growth 7, 87– 115.Google Scholar
Mankiw G., D. Romer & D. Weil 1992 A contribution to the empirics of economic growth. Quarterly Journal of Economics 107, 407– 437.
Mincer J. 1974 Schooling, Experience and Earnings. New York: Columbia University Press.
Nelson R. & E. Phelps 1966 Investment in humans, technological diffusion, and economic growth. American Economic Review 56, 69– 83.Google Scholar
Nehru V., E. Swanson & A. Dubey 1995 A new database on human capital stocks in developing and industrial countries: Sources, methodology and results. Journal of Development Economics 46, 379– 401.Google Scholar
Nonneman W. & P. Vanhoudt 1996 A further augmentation of the Solow model and the empirics of economic growth for OECD countries. Quarterly Journal of Economics 111, 943– 953.Google Scholar
Parente S.L. & E.C. Prescott 1994 Barriers to technology adoption and development. Journal of Political Economy 102, 298– 321.Google Scholar
Perez-Sebastian F. 2000 Transitional dynamics in an R&D-based growth model with imitation: Comparing its predictions to the data. Journal of Monetary Economics 42, 437– 461.Google Scholar
Psacharopoulos G. 1994 Returns to investment in education: A global update. World Development 22, 1325– 1343.Google Scholar
Sala-i-Martin X. 1996 The classical approach to convergence analysis. Economic Journal 106, 1019– 1036.Google Scholar
Santos M. 2000 Accuracy of numerical solutions using the Euler equation residuals. Econometrica 68, 1377– 1402.Google Scholar
Summer R. & A. Heston 1991 The Penn World Table (Mark 5): An expanded set of international comparisons: 1950–1988. Quarterly Journal of Economics 106, 327– 368.Google Scholar