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Persistent Differences in National Productivity Growth Rates with a Common Technology and Free Capital Mobility


  • Buiter, Willem H.
  • Kletzer, Kenneth


The paper develops a two-country endogenous growth model to investigate possible causes for the existence and persistence of productivity growth differentials between nations, even though these countries show a common technology, constant returns to scale and perfect international capital mobility. Private consumption is derived from a three-period overlapping generations specification. The source of productivity (growth) differentials in our model is the existence of a non-traded capital good (`human capital') whose augmentation requires a non-traded current input (time spent by the young in education rather than leisure). We consider the influence on productivity growth differentials of private thrift, public debt, the taxation of capital and savings and of policy towards human capital formation.

Suggested Citation

  • Buiter, Willem H. & Kletzer, Kenneth, 1991. "Persistent Differences in National Productivity Growth Rates with a Common Technology and Free Capital Mobility," CEPR Discussion Papers 542, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:542

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    References listed on IDEAS

    1. Cohen, Daniel & Wyplosz, Charles, 1989. "The European Monetary Union: An Agnostic Evaluation," CEPR Discussion Papers 306, C.E.P.R. Discussion Papers.
    2. Giovannini, A. & Spaventa, L., 1990. "Fiscal Rules in the Europen Monetary Union: A No-Entry Clause," Papers 8, Roma "la Sapienza" - Scienze Economiche.
    3. Eichengreen, Barry, 1990. "Is Europe an Optimum Currency Area?," CEPR Discussion Papers 478, C.E.P.R. Discussion Papers.
    4. Barry Eichengreen., 1990. "Costs and Benefits of European Monetary Unification," Economics Working Papers 90-150, University of California at Berkeley.
    5. Van Der Ploeg, F., 1990. "Budgetary Aspects Of Economic And Monetary Integration Inn Europe," Papers 9037, Tilburg - Center for Economic Research.
    6. Paul Masson & Jacques Melitz, 1991. "Fiscal policy independence in a European Monetary Union," Open Economies Review, Springer, vol. 2(2), pages 113-136, June.
    7. van der Ploeg, F., 1990. "Macroeconomic policy coordination during the various phases of economic and monetary integration in Europe," Discussion Paper 1990-61, Tilburg University, Center for Economic Research.
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    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Philippe Michel & Jean-Pierre Vidal, 2000. "Economic integration and growth under intergenerational financing of human-capital formation," Journal of Economics, Springer, vol. 72(3), pages 275-294, October.
    2. Antoine d'Autume, 1994. "Choix éducatifs, équilibre général et croissance économique," Économie et Prévision, Programme National Persée, vol. 116(5), pages 35-48.
    3. Assaf Razin & Chi-Wa Yuen, 1992. "Convergence in Growth Rates: The Role of Capital Mobility and International Taxation," NBER Working Papers 4214, National Bureau of Economic Research, Inc.
    4. Cahuc, Pierre & Michel, Philippe, 1996. "Minimum wage unemployment and growth," European Economic Review, Elsevier, vol. 40(7), pages 1463-1482, August.
    5. Pozzolo, Alberto Franco, 2004. "Endogenous Growth in Open Economies - A Survey of Major Results," Economics & Statistics Discussion Papers esdp04020, University of Molise, Dept. EGSeI.
    6. Feenstra, Robert C., 1996. "Trade and uneven growth," Journal of Development Economics, Elsevier, vol. 49(1), pages 229-256, April.
    7. Xavier Sala-i-Martin, 1992. "Transfers," NBER Working Papers 4186, National Bureau of Economic Research, Inc.
    8. Lücke, Matthias, 1992. "Technischer Fortschritt und die Arbeitsteilung zwischen Industrie- und Entwicklungsländern: eine empirische Analyse," Open Access Publications from Kiel Institute for the World Economy 758, Kiel Institute for the World Economy (IfW).
    9. Yasushi Iwamoto & Akihisa Shibata, 1999. "Foreign Tax Credit and the Current Account," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(2), pages 131-148, May.
    10. Thomas Krichel, 1998. "Growing at Different Rates," School of Economics Discussion Papers 9801, School of Economics, University of Surrey.
    11. Casper Ewijk, 1994. "Growth promoting policies, distribution, and the balance of payments," Journal of Economics, Springer, vol. 60(1), pages 55-80, February.
    12. Pierre Granier & Philippe Michel, 1994. "Les conflits d'intérêt entre travailleurs qualifiés et travailleurs non qualifiés," Économie et Prévision, Programme National Persée, vol. 115(4), pages 125-139.


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