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Can Transition Dynamics Explain The International Output Data?

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  • PAPAGEORGIOU, CHRIS
  • PEREZ-SEBASTIAN, FIDEL

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.

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Bibliographic Info

Article provided by Cambridge University Press in its journal Macroeconomic Dynamics.

Volume (Year): 8 (2004)
Issue (Month): 04 (September)
Pages: 466-492

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Handle: RePEc:cup:macdyn:v:8:y:2004:i:04:p:466-492_03

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Citations

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Cited by:
  1. Chris Papageorgiou & Fidel Pérez Sebastián, 2005. "Is The Speed Of Convergence A Good Proxy For The Transitional Growth Path?," Working Papers. Serie AD 2005-33, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  2. Mark J. Holmes & Jesús Otero & Theodore Panagiotidis, 2013. "A Note on the Extent of US Regional Income Convergence," Working Paper Series 10_13, The Rimini Centre for Economic Analysis.
  3. Chris Papageorgiou & Fidel Pérez Sebastián & María Dolores Guilló Fuentes, 2010. "A unified theory of structural change," Working Papers. Serie AD 2010-34, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).

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