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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
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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

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