Multiple Regimes and Cross-Country Growth Behaviour
AbstractThis paper provides some new evidence on the behavior of cross-country growth rates. We reject the linear model commonly used to study cross-country growth behavior in favor of a multiple regime alternative in which different economies obey different linear models when grouped according to initial conditions. Further, the marginal product of capital is shown to vary with the level of economic development. These results are consistent with growth models which exhibit multiple steady states. Our results call into question inferences that have been made in favor of the convergence hypothesis and further suggest that the explanatory power of the Solow growth model may be enhanced with a theory of aggregate production function differences. Copyright 1995 by John Wiley & Sons, Ltd.
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Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.
Volume (Year): 10 (1995)
Issue (Month): 4 (Oct.-Dec.)
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Web page: http://www.interscience.wiley.com/jpages/0883-7252/
Other versions of this item:
- Durlauf, S.M. & Johnson, P.A., 1995. "Multiple Regimes and Cross-Country Growth Behavior," Working papers 9419r, Wisconsin Madison - Social Systems.
- Durlauf, S.N. & Johnson, P.A., 1994. "Multiple Regimes and Cross-Country Growth Behavior," Working papers 9419, Wisconsin Madison - Social Systems.
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