IDEAS home Printed from https://ideas.repec.org/p/brs/wpaper/332.html
   My bibliography  Save this paper

History or path dependence in mixed-Poisson growth: Brazil, 1822-2000, and USA, 1869-1996, with an estimate of the world mixing distribution at start-up

Author

Listed:
  • Steve de Castro

    () (Departamento de Economia (Department of Economics) Faculdade de Economia, Administração, Contabilidade e Ciência da Informação e Documentação (FACE) (Faculty of Economics, Administration, Accounting and Information Science) Universidade de Brasília)

  • Flávio Gonçalves

    (Departamento de Economia, UFPR)

Abstract

The growth empirics of two separate but related issues are studied. In the first, the annual data on GDP per person (GDPpp) for Brazil, 1822-2000, and the US, 1869-1996, were converted into arrival times for innovations defined as permanent increments to GDPpp of given size (e.g. 3%). We say an economy exhibits history dependence if its arrival times can be shown to come from a homogenous Poisson process, that is, with a constant mean arrival rate of innovations (the Poisson parameter, λ). Brazil’s growth trajectory since 1822 is shown not to be history dependent in this sense, though both its truncated series, 1889-2000, and the US, 1869-1996, passed the tests. Brazil’s stagnation in the mid to late 19th century, when coupled to its growth spurt in the 20th, is the suggested reason for the failure. The second study uses the Summers-Heston data for 134 economies in 2000 to estimate a discrete, theoretical distribution for the λ at start-up in 1800, based on the (unproved) assumption that each economy drew an arrival rate from this “mixing” distribution and stayed with it. The results show that if innovations are assumed to be big, rare events, then the world mixing distribution will be skewed, and all the λ drawn at start-up will be almost equal and thus the dispersion of incomes across nations 200 years later will then be due only to random variations along paths generated by the same homogenous Poisson process.

Suggested Citation

  • Steve de Castro & Flávio Gonçalves, 2010. "History or path dependence in mixed-Poisson growth: Brazil, 1822-2000, and USA, 1869-1996, with an estimate of the world mixing distribution at start-up," Working papers - Textos para Discussao do Departamento de Economia da Universidade de Brasilia 332, Departamento de Economia da Universidade de Brasilia.
  • Handle: RePEc:brs:wpaper:332
    as

    Download full text from publisher

    File URL: http://e-groups.unb.br/face/eco/textos/didaticos/WP%20332.pdf
    File Function: First version, 2010
    Download Restriction: no

    References listed on IDEAS

    as
    1. Dutt, Amitava Krishna, 1984. "Stagnation, Income Distribution and Monopoly Power," Cambridge Journal of Economics, Oxford University Press, vol. 8(1), pages 25-40, March.
    2. Halevi, Joseph, 1996. "The significance of the theory of vertically integrated processes for the problem of economic development," Structural Change and Economic Dynamics, Elsevier, vol. 7(2), pages 163-171, June.
    3. Engelbert Stockhammer, 1999. "Robinsonian and Kaleckian Growth. An Update on Post-Keynesian Growth Theories," Department of Economics Working Papers wuwp067, Vienna University of Economics and Business, Department of Economics.
    4. Araujo, Ricardo Azevedo & Teixeira, Joanilio Rodolpho, 2002. "Structural change and decisions on investment allocation," Structural Change and Economic Dynamics, Elsevier, vol. 13(2), pages 249-258, June.
    5. Blecker, Robert A, 1989. "International Competition, Income Distribution and Economic Growth," Cambridge Journal of Economics, Oxford University Press, vol. 13(3), pages 395-412, September.
    6. Lavoie, Marc, 1997. "Pasinetti's Vertically Hyper-integrated Sectors and Natural Prices," Cambridge Journal of Economics, Oxford University Press, vol. 21(4), pages 453-467, July.
    7. M. Ruth & K. Donaghy & P. Kirshen, 2006. "Introduction," Chapters,in: Regional Climate Change and Variability, chapter 1 Edward Elgar Publishing.
    8. Anthony P. Thirlwall, 2011. "The Balance of Payments Constraint as an Explanation of International Growth Rate Differences," PSL Quarterly Review, Economia civile, vol. 64(259), pages 429-438.
    9. Bhaduri, Amit & Marglin, Stephen, 1990. "Unemployment and the Real Wage: The Economic Basis for Contesting Political Ideologies," Cambridge Journal of Economics, Oxford University Press, vol. 14(4), pages 375-393, December.
    10. Taylor, Lance, 1985. "A Stagnationist Model of Economic Growth," Cambridge Journal of Economics, Oxford University Press, vol. 9(4), pages 383-403, December.
    11. G. C. Harcourt, 2010. "Foreword to the Symposium," Review of Political Economy, Taylor & Francis Journals, vol. 22(4), pages 477-480.
    12. Dutt, Amitava Krishna, 1987. "Alternative Closures Again: A Comment on 'Growth, Distribution and Inflation.'," Cambridge Journal of Economics, Oxford University Press, vol. 11(1), pages 75-82, March.
    13. Roberto Scazzieri, 1990. "Vertical Integration in Economic Theory," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 13(1), pages 20-46, September.
    14. Eatwell, John, 1983. "The Long-Period Theory of Employment," Cambridge Journal of Economics, Oxford University Press, vol. 7(3-4), pages 269-285, September.
    15. Marc Lavoie, 2003. "Kaleckian Effective Demand and Sraffian Normal Prices: Towards a reconciliation," Review of Political Economy, Taylor & Francis Journals, vol. 15(1), pages 53-74.
    16. Luigi L. Pasinetti, 2005. "The Cambridge School of Keynesian Economics," Cambridge Journal of Economics, Oxford University Press, vol. 29(6), pages 837-848, November.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    stochastic growth; mixed Poisson processes; statistical tests;

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:brs:wpaper:332. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Luciano Póvoa). General contact details of provider: http://edirc.repec.org/data/deunbbr.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.