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Regimes of Growth and Economic Integration. Why Poor Countries Cannot Join the "Club" of the Rich?

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  • Trofimov Georgy

Abstract

The author argues that different regimes of growth experienced by rich and poor economies create barriers to global economic integration through the world capital market. The lack of capital flows from rich to poor countries is explained by the heterogeneity of these countries in terms of the engine of growth. The pattern of integration is determined for an open economy by its initial ratio of knowledge to assets: if it is high, the economy is booming, otherwise it grows gradually. This is an implication of the comparative advantage principle: a capital-scarce country attracts new investment at the initial stage of integration, while a capital-redundant country exports capital at this stage.

Suggested Citation

  • Trofimov Georgy, 2003. "Regimes of Growth and Economic Integration. Why Poor Countries Cannot Join the "Club" of the Rich?," EERC Working Paper Series 03-03e, EERC Research Network, Russia and CIS.
    • Handle: RePEc:eer:wpalle:03-03e
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    References listed on IDEAS

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    More about this item

    Keywords

    Russia; economic growth; integration; international capital market; club convergence;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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