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Global Income Divergence, Trade and Industrialization: The Geography of Growth Take-Offs

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Author Info
Baldwin, Richard
Martin, Philippe
Ottaviano, Gianmarco Ireo Paolo

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Abstract

This paper takes a modest step towards formalizing the theoretical interconnections among four post-Industrial-Revolution phenomena – the industrialization and growth take-off of rich ‘northern’ nations, massive global income divergence, and rapid trade expansion. Specifically, we present a stages-of-growth model in which the four phenomena are jointly endogenous and are all triggered by a gradual fall in the cost of doing business internationally. Beyond providing a simple framework for exploring the logical connections among these phenomona, the model itself may be of some interest because it is, to our knowledge, the first endogenous growth model to display this Rostovian stages-of-growth feature.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1803.

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Date of creation: Mar 1998
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Handle: RePEc:cpr:ceprdp:1803

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Related research
Keywords: Economic Geography; Endogenous Growth; growth take-off; industrial revolution; trade and development;

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Find related papers by JEL classification:
F01 - International Economics - - General - - - Global Outlook
F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
N13 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations - - - Europe: Pre-1913
O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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  1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October. [Downloadable!] (restricted)
  2. Ricardo J. Caballero & Adam B. Jaffe, 1993. "How High are the Giants' Shoulders: An Empirical Assessment of Knowledge Spillovers and Creative Destruction in a Model of Economic Growth," NBER Working Papers 4370, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Venables, Anthony J., 1987. "Customs union and tariff reform under imperfect competition," European Economic Review, Elsevier, vol. 31(1-2), pages 103-110. [Downloadable!] (restricted)
  4. Martin, Philippe & Ottaviano, Gianmarco Ireo Paolo, 1996. "Growing Locations: Industry Location in a Model of Endogenous Growth," CEPR Discussion Papers 1523, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  5. Sullivan, Richard J., 1989. "England's Age of invention: The acceleration of patents and patentable invention during the industrial revolution," Explorations in Economic History, Elsevier, vol. 26(4), pages 424-452, October. [Downloadable!] (restricted)
  6. Crafts, N. F. R., 1995. "Exogenous or Endogenous Growth? The Industrial Revolution Reconsidered," The Journal of Economic History, Cambridge University Press, vol. 55(04), pages 745-772, December. [Downloadable!]
  7. Luis A. Rivera-Batiz & Paul M. Romer, 1990. "Economic Integration and Endogenous Growth," NBER Working Papers 3528, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Baldwin, Richard & Forslid, Rikard, 1996. "Trade Liberalization and Endogenous Growth: A q-Theory Approach," CEPR Discussion Papers 1397, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  9. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1989. "Industrialization and the Big Push," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1003-26, October. [Downloadable!] (restricted)
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  10. Jaffe, Adam B & Trajtenberg, Manuel & Henderson, Rebecca, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 577-98, August. [Downloadable!] (restricted)
    Other versions:
  11. Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," UWO Department of Economics Working Papers 8904, University of Western Ontario, Department of Economics.
    Other versions:
  12. Kelly, Morgan, 1997. "The Dynamics of Smithian Growth," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 939-64, August.
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  13. Krugman, Paul, 1981. "Trade, accumulation, and uneven development," Journal of Development Economics, Elsevier, vol. 8(2), pages 149-161, April. [Downloadable!] (restricted)
  14. Baldwin, Richard, 1998. "Agglomeration and Endogenous Capital," CEPR Discussion Papers 1845, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  15. Crafts, N F R, 1984. "Patterns of Development in Nineteenth Century Europe," Oxford Economic Papers, Oxford University Press, vol. 36(3), pages 438-58, November. [Downloadable!] (restricted)
  16. Baldwin, Richard & Forslid, Rikard, 1997. "The Core-Periphery Model and Endogenous Growth," CEPR Discussion Papers 1749, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  17. Venables, Anthony J, 1996. "Equilibrium Locations of Vertically Linked Industries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(2), pages 341-59, May.
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  18. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June. [Downloadable!] (restricted)
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  19. Douglass C. North, 1968. "Sources of Productivity Change in Ocean Shipping, 1600-1850," Journal of Political Economy, University of Chicago Press, vol. 76, pages 953. [Downloadable!] (restricted)
  20. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1989. "Income Distribution, Market Size, and Industrialization," The Quarterly Journal of Economics, MIT Press, vol. 104(3), pages 537-64, August. [Downloadable!] (restricted)
    Other versions:
  21. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
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  22. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July. [Downloadable!] (restricted)
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