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Did Globalization Lead to Segmentation? Identifying Cross-Country Growth Regimes in the Long-Run

Listed author(s):
  • Gianfranco Di Vaio

    (University of Perugia)

  • Kerstin Enflo

    (Department of Economic History, Lund Universitet)

Economic historians have stressed that income convergence was a key feature of the 'OECD-club' and that globalization was among the accelerating forces of this process in the long-run. This view has however been challenged, since it suffers from an ad hoc selection of countries. In the paper, a mixture model is applied to a sample of 64 countries to endogenously analyze the cross-country growth behavior over the period 1870-2003. Results show that growth patterns were segmented in two worldwide regimes, the fi?rst one being characterized by convergence, and the other one denoted by divergence. Interestingly, when three historical epochs are analyzed separately (1870-1913; 1913-1950; and 1950-2003), the dynamics which come to dominate over the whole period emerged only during the post-1950 years. In contrast, the First Global Wave was marked by global divergence. Therefore, history does not provide unambiguous evidence about globalization and convergence.

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File URL: http://www.econ.ku.dk/english/research/publications/wp/dp_2009/0908.pdf/
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Paper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number 09-08.

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Length: 14 pages
Date of creation: Apr 2009
Handle: RePEc:kud:kuiedp:0908
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