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Economic growth in a politically fragmented world

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  • Jeong, Byeongju

Abstract

I explore the effects of economic and political integration on economic growth in a model of vintage human capital and sequential intergenerational bargains. Adoption of a new technology raises not only the productivity but also the bargaining position of the future generations, creating a bias for the current generations to preserve the current technology. Economic integration (i.e., the sharing of frontier technology among countries) promotes growth if there is a diversity in human capital distribution or a coordination failure across countries. On the other hand, political integration (i.e., the merging of countries into a single bargain) promotes stagnation as it eliminates the diversity and coordination failures.

Suggested Citation

  • Jeong, Byeongju, 2014. "Economic growth in a politically fragmented world," Journal of Comparative Economics, Elsevier, vol. 42(2), pages 402-416.
    • Handle: RePEc:eee:jcecon:v:42:y:2014:i:2:p:402-416
    DOI: 10.1016/j.jce.2013.05.005
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    References listed on IDEAS

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    More about this item

    Keywords

    Growth; Stagnation; Intergenerational bargain; Economic integration; Political fragmentation;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative

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