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Economic Development and Growth in the World Economy

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Author Info
Rui Castro (Universite de Montreal)

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Abstract

This paper investigates whether technological shocks, constructed to be consistent with the observed cross-country income dispersion, are also capable of accounting for development regularities related to capital accumulation. This question is approached via a quantitative theoretical analysis of an integrated world economy model. An open economy framework constrains country heterogeneity to be consistent with international capital flows. Moreover, it enables the study of distinctively open economy development facts. The model produces time-invariant cross-sectional distributions for development variables, whose properties are quantitatively compared with the Penn World Table data set. The model generates too little dispersion in capital-output ratios and investment rates. However, it is consistent with the relative importance of investment, saving, and international capital flows for economic development. (Copyright: Elsevier)

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File URL: http://dx.doi.org/10.1016/j.red.2004.10.006
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Publisher Info
Article provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.

Volume (Year): 8 (2005)
Issue (Month): 1 (January)
Pages: 195-230
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Handle: RePEc:red:issued:v:8:y:2005:i:1:p:195-230

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Related research
Keywords: Economic development; economic growth; open economy macroeconomics; quantitative dynamic general equilibrium analysis; incomplete markets;

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Find related papers by JEL classification:
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General
O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

References listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Garett Jones, 2006. "IQ in the Ramsey Model: A Naive Calibration," DEGIT Conference Papers c011_063, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
    Other versions:
  2. Fuentes, Raúl, 2005. "Aid, Policies and Growth: A Non-Canonical Alternative for solving This Puzzle," Proceedings of the German Development Economics Conference, Kiel 2005 14, Verein für Socialpolitik, Research Committee Development Economics. [Downloadable!]
  3. CASTRO, Rui, 2005. "Economic Development under Alternative Trade Regimes," Cahiers de recherche 2005-02, Universite de Montreal, Departement de sciences economiques. [Downloadable!]
    Other versions:
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