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

Author

Listed:
  • Gianmarco Ottaviano

    (UNIBO - Alma Mater Studiorum Università di Bologna = University of Bologna)

  • Richard Baldwin

    (IHEID - Institut de hautes études internationales et du développement - UNIGE - Université de Genève = University of Geneva)

  • Philippe Martin

    (CEPR - Center for Economic Policy Research)

Abstract

This article formalizes 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. In stages-of-growth model, the four phenomena are jointly endogenous and are triggered by falling trade costs. In the first growth stage (with high trade costs) industry is dispersed internationally, and growth is low. In the second (medium trade costs), the North industrializes rapidly, growth take-off, and the South diverges. In the third (low trade costs), highgrowth and global divergence become self-sustaining. In the fourth stage, when the cases of "trading'' ideas decreases, the South quickly industrializes and converges.

Suggested Citation

  • Gianmarco Ottaviano & Richard Baldwin & Philippe Martin, 2001. "Global Income Divergence, Trade, and Industrialization: The Geography of Growth Take-Offs," Post-Print hal-03609282, HAL.
  • Handle: RePEc:hal:journl:hal-03609282
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    References listed on IDEAS

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    More about this item

    Keywords

    growth; Take-off; Industrial revolution; economic geography; endogenous growth; trade and development;
    All these keywords.

    JEL classification:

    • F01 - International Economics - - General - - - Global Outlook
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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