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Global Income Divergence, Trade and Industrialization: The Geography of Growth Take-Offs

  • Baldwin, Richard
  • Martin, Philippe
  • Ottaviano, Gianmarco

This paper takes a modest step towards formalizing the theoretical interconnections among four post-Industrial-Revolution phenomena – the industrialization and growth take-off of rich ‘northern’ nations, massive global income divergence, and rapid trade expansion. Specifically, we present a stages-of-growth model in which the four phenomena are jointly endogenous and are all triggered by a gradual fall in the cost of doing business internationally. Beyond providing a simple framework for exploring the logical connections among these phenomona, the model itself may be of some interest because it is, to our knowledge, the first endogenous growth model to display this Rostovian stages-of-growth feature.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1803.

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Date of creation: Mar 1998
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Handle: RePEc:cpr:ceprdp:1803
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  9. Ricardo J. Caballero & Adam B. Jaffe, 1993. "How High are the Giants' Shoulders: An Empirical Assessment of Knowledge Spillovers and Creative Destruction in a Model of Economic Growth," NBER Chapters, in: NBER Macroeconomics Annual 1993, Volume 8, pages 15-86 National Bureau of Economic Research, Inc.
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  26. Venables, Anthony J., 1987. "Customs union and tariff reform under imperfect competition," European Economic Review, Elsevier, vol. 31(1-2), pages 103-110.
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  33. 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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  36. Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," NBER Working Papers 3577, National Bureau of Economic Research, Inc.
  37. Douglass C. North, 1968. "Sources of Productivity Change in Ocean Shipping, 1600-1850," Journal of Political Economy, University of Chicago Press, vol. 76, pages 953.
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