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Convergence and Growth Linkages Between North and South

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  • John F. Helliwell
  • Alan Chung

Abstract

Using cross-sectional data for 98 countries for 1960-85, this paper shows that growth of per capita GDP depends negatively on initial income levels, as implied by the convergence hypothesis, as well as on international differences in investment rates in physical and human capital. There is some evidence of slight economies of scale (1.06) among the industrial countries. The evidence in favor of the convergence hypothesis is strongest for the countries of the OECD and Latin America, and weakest for Asia. Growth in Latin America and Africa is lower than elsewhere even after allowing for international differences in initial income levels, scale, schooling and capital investment. Analysis of Solow residuals for the OECD countries (for which capital stock data are available) shows convergence in rates of technical progress, suggesting that convergence of per capita GDPs is not Just a function of differences in investment rates. The linkage between per capita GDP and the real exchange rate is found to be strong for the OECD and Asia, weak for Africa and negative for Latin America.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3948.

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Date of creation: Jan 1992
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Publication status: published as North-South Linkages and International Macroeconomic Policy, Vines, Davidand David Currie, eds., Cambridge: Cambridge University Press, 1995,pp. 77-100.
Handle: RePEc:nbr:nberwo:3948

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Citations

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Cited by:
  1. Gundlach, Erich, 1993. "On the empirics of capital accumulation and economic growth," Kiel Working Papers 577, Kiel Institute for the World Economy.
  2. Magnus Blomstrom & Robert E. Lipsey & Mario Zejan, 1992. "What Explains Developing Country Growth?," NBER Working Papers 4132, National Bureau of Economic Research, Inc.
  3. John F. Helliwell, 1992. "Empirical Linkages Between Democracy and Economic Growth," NBER Working Papers 4066, National Bureau of Economic Research, Inc.
  4. Paola Barrientos, 2007. "Theory, History and Evidence of Economic Convergence in Latin America," Development Research Working Paper Series 13/2007, Institute for Advanced Development Studies.
  5. John F. Helliwell, 1992. "International Growth Linkages: Evidence from Asia and the OECD," NBER Working Papers 4245, National Bureau of Economic Research, Inc.
  6. Rensman, Marieke, 1996. "Economic growth and technological change in the long run : a survey of theoretical and empirical literature," Research Report 96C10, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
  7. Par Hansson & Magnus Henrekson, 1994. "What makes a country socially capable of catching up?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 130(4), pages 760-783, December.

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