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Takeoffs

  • Joshua Aizenman
  • Mark M. Spiegel

This paper identifies factors associated with takeoff-a sustained period of high growth following a period of stagnation. Countries that experience takeoffs average 2.3% annual growth following their stagnation episodes, while those that do not average 0%. Using probit, we find that de jure trade openness is positively and significantly associated with takeoffs. A one-standard-deviation increase in de jure trade openness is associated with a 55% increase in the probability of a takeoff in our default specification. Capital account openness encourages takeoff responses, but measures of de facto trade openness are found to be poor predictors of takeoffs. We also examine the determinants of nations achieving "sustained" takeoffs; i.e. those lasting eight years or longer. Takeoffs in countries with more commodity-intensive output bundles are less likely to be sustained, suggesting that adverse terms-of-trade shocks may play a role in ending long-term high growth episodes. Copyright � 2010 Blackwell Publishing Ltd.

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Article provided by Wiley Blackwell in its journal Review of Development Economics.

Volume (Year): 14 (2010)
Issue (Month): 2 (05)
Pages: 177-196

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Handle: RePEc:bla:rdevec:v:14:y:2010:i:2:p:177-196
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  1. William Easterly, 2005. "Reliving the '50s: The Big Push, Poverty Traps, and Takeoffs in Economic Development," Working Papers 65, Center for Global Development.
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  8. Benjamin F. Jones & Benjamin A. Olken, 2005. "Do Leaders Matter? National Leadership and Growth Since World War II," The Quarterly Journal of Economics, MIT Press, vol. 120(3), pages 835-864, August.
  9. Jeffrey Sachs & Andrew M. Warner, 1995. "Economic Convergence and Economic Policies," CASE Network Studies and Analyses 0035, CASE-Center for Social and Economic Research.
  10. Jess Benhabib & Mark Spiegel, 2002. "Human capital and technology diffusion," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
  11. Rodrik, Dani, 1998. "Where Did all the Growth Go? External Shocks, Social Conflict and Growth Collapses," CEPR Discussion Papers 1789, C.E.P.R. Discussion Papers.
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  13. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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