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Can Transition Dynamics Explain the International Output Data?

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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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  • Chris Papageorgiou & Fidel Perez-Sebastian, 2003. "Can Transition Dynamics Explain the International Output Data?," Departmental Working Papers 2003-013, Department of Economics, Louisiana State University.
    • Handle: RePEc:lsu:lsuwpp:2003-013
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    Cited by:

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    2. Chris Papageorgiou & Fidel Pérez Sebastián, 2005. "Is The Speed Of Convergence A Good Proxy For The Transitional Growth Path?," Working Papers. Serie AD 2005-33, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    3. Holmes, Mark J. & Otero, Jesús & Panagiotidis, Theodore, 2014. "A Note On The Extent Of U.S. Regional Income Convergence," Macroeconomic Dynamics, Cambridge University Press, vol. 18(7), pages 1635-1655, October.
    4. Oscar Afonso, 2010. "Non‐Scale Effects Of International Technological‐Knowledge Diffusion On Southern Growth And Wages," The Japanese Economic Review, Japanese Economic Association, vol. 61(3), pages 341-366, September.
    5. Ang, James B., 2010. "Research, technological change and financial liberalization in South Korea," Journal of Macroeconomics, Elsevier, vol. 32(1), pages 457-468, March.
    6. Dolores Guilló, María & Papageorgiou, Chris & Perez-Sebastian, Fidel, 2011. "A unified theory of structural change," Journal of Economic Dynamics and Control, Elsevier, vol. 35(9), pages 1393-1404, September.

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