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Can Transition Dynamics Explain The International Output Data?

  • Chris Papageorgiou

    ()

    (Louisiana State University)

  • Fidel Pérez Sebastián

    ()

    (Universidad de Alicante)

This paper studies the transition dynamics predictions of an R&D-based growth model, and evaluates their performance in explaining income disparities across nations. We find that the fraction of the observed cross-country income variation explained by the transitional dynamics of the model is as large as the one accounted by existing steady-state level regressions. Our results suggest that the traditional view of a world in which nations move along their distinct balanced-growth paths is as likely as the one in which countries move along adjustment paths toward a common (very long-run) steady state.

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File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2001-02.pdf
File Function: Fisrt version / Primera version, 2001
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Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2001-02.

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Length: 25 pages
Date of creation: Jan 2001
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasad:2001-02
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