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Openness and economic growth in developing countries

  • Gundlach, Erich

Openness appears to have a strong impact on economic growth especially in DCs, which typically exhibit a high share of physical capital in factor income and a low share of labor. In the neoclassical growth model with partial capital mobility, physical capital's share in factor income determines the difference in the predicted convergence rates for open and closed economies. With a 60 percent share as in developing countries, the convergence rates should differ by a factor of about 2.5. My regression results for a sample of open and closed DCs roughly confirm this hypothesis.

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Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 749.

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Date of creation: 1996
Date of revision:
Handle: RePEc:kie:kieliw:749
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  1. Gundlach, Erich, 1995. "The role of human capital in economic growth: new results and alternative interpretations," Open Access Publications from Kiel Institute for the World Economy 30189, Kiel Institute for the World Economy (IfW).
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  9. Montiel, Peter J, 1994. "Capital Mobility in Developing Countries: Some Measurement Issues and Empirical Estimates," World Bank Economic Review, World Bank Group, vol. 8(3), pages 311-50, September.
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  20. Rodrik, Dani, 1994. "King Kong Meets Godzilla: The World Bank and The East Asian Miracle," CEPR Discussion Papers 944, C.E.P.R. Discussion Papers.
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  26. Gundlach, Erich, 1996. "Solow meets market socialism: regional convergence of output per worker in China," Kiel Working Papers 726, Kiel Institute for the World Economy.
  27. repec:oup:qjecon:v:107:y:1992:i:2:p:407-37 is not listed on IDEAS
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