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Endogenous TFP and Cross-Country Income Differences

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Author Info

  • Juan Carlos Cordoba

    (Rice University)

  • Marla Ripoll

    (University of Pittsburgh)

Abstract

This paper explores the quantitative implications of a class of endogenous growth models for cross-country income differences. These models exhibit international spillovers, no scale effects and conditional convergence, and thus they overcome some difficulties faced by the early generation of endogenous growth models. Cross-country income differences arise in the model as the result of different distortions in the accumulation of rival factors of production, the objects, and in the accumulation of nonrival factor of production, the ideas. We show that object gaps play a much larger role to explain income gaps in models with endogenous TFP than in models with exogenous TFP. We also show, using a carefully calibrated version of the model, that most of the cross-country differences in output per worker are explained by barriers to the accumulation of rival factors (physical and human capital) rather than by barriers to the accumulation of knowledge.

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Bibliographic Info

Paper provided by EconWPA in its series Development and Comp Systems with number 0512018.

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Length: 45 pages
Date of creation: 20 Dec 2005
Date of revision:
Handle: RePEc:wpa:wuwpdc:0512018

Note: Type of Document - pdf; pages: 45
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Web page: http://128.118.178.162

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Keywords: endogenous growth; technology diffusion;

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References

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Citations

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Cited by:
  1. Jaime Alonso-Carrera & Xavier Raurich, 2007. "Growth, Sectoral Composition, And The Wealth Of Nations," CAMA Working Papers 2007-15, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  2. El-hadj M. Bah, 2009. "A Three-Sector Model of Structural Transformation and Economic Development," DEGIT Conference Papers c014_039, DEGIT, Dynamics, Economic Growth, and International Trade.
  3. Agnani, Betty & Iza Padilla, María Amaya & Gutiérrez Huerta, María José, 2007. "R&D Policy in Economies with Endogenous Growth and Non-Renewable Resources," DFAEII Working Papers 2007-05, University of the Basque Country - Department of Foundations of Economic Analysis II.
  4. Weshah Razzak, 2007. "Explaining the gaps in labour productivity in some developed countries," Money Macro and Finance (MMF) Research Group Conference 2006 30, Money Macro and Finance Research Group.
  5. Razzak, Weshah, 2006. "Explaining the gaps in labour productivity for some developed countries," MPRA Paper 53, University Library of Munich, Germany.
  6. Areendam Chanda & Beatrice Farkas, 2009. "Technology-Skill Complementarity and International TFP Differences," DEGIT Conference Papers c014_028, DEGIT, Dynamics, Economic Growth, and International Trade.
  7. Heshmati, Almas & Kumbhakar, Subal C., 2011. "A General Model of Technical Change with an Application to the OECD Countries," IZA Discussion Papers 6004, Institute for the Study of Labor (IZA).
  8. Christian Daude, 2012. "Development Accounting: Lessons for Latin America," OECD Development Centre Working Papers 313, OECD Publishing.
  9. Cristiana & Teodora Borota, 2011. "World Trade Patterns and Prices: The Role of Productivity and Quality Heterogeneity," Working papers 19, National Bank of Serbia.
  10. Benedetti Fasil, Cristiana & Borota, Teodora, 2010. "World Trade Patterns and Prices: The Role of Productivity and Quality Heterogeneity," Working Paper Series 2010:7, Uppsala University, Department of Economics.
  11. Chang-Tai Hsieh & Peter J. Klenow, 2010. "Development Accounting," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(1), pages 207-23, January.
  12. Tapas Mishra & Bazoumana Ouattara & Mamata Parhi, 2011. "A Note on Shock Persistence in Total Factor Productivity Growth," Economics Bulletin, AccessEcon, vol. 31(2), pages 1869-1893.

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