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Reassessing The Impact Of Barriers To Capital Accumulation On International Income Differences

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  • John S. Landon-Lane
  • Peter E. Robertson

Abstract

Can barriers to capital accumulation account for large differences in GDP per capita? We reconsider the claim that these barriers have an amplified effect on income levels in a model where both modern and traditional sector technologies are active. We show that this claim is not correct. We do find, however, that the removal of barriers to capital accumulation can cause large changes in the employment shares of labor. Thus the model can account for an important stylized fact of the development process, with labor moving from the traditional to the modern sector as income levels rise. Copyright 2007 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

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  • John S. Landon-Lane & Peter E. Robertson, 2007. "Reassessing The Impact Of Barriers To Capital Accumulation On International Income Differences," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(1), pages 147-154, February.
  • Handle: RePEc:ier:iecrev:v:48:y:2007:i:1:p:147-154
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    Cited by:

    1. Wingender, Asger Moll, 2015. "Skill complementarity and the dual economy," European Economic Review, Elsevier, vol. 74(C), pages 269-285.
    2. John S. Landon-Lane & Peter E. Robertson, 2009. "Factor Accumulation And Growth Miracles In A Two-Sector Neoclassical Growth Model," Manchester School, University of Manchester, vol. 77(2), pages 153-170, March.
    3. Esteban-Pretel, Julen & Sawada, Yasuyuki, 2014. "On the role of policy interventions in structural change and economic development: The case of postwar Japan," Journal of Economic Dynamics and Control, Elsevier, vol. 40(C), pages 67-83.

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