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Which Parts of Globalization Matter for Catch-up Growth?


  • Paul M. Romer


Economists devote too much attention to international flows of goods and services and not enough to international flows of ideas. Traditional trade flows are an imperfect substitute for flows of the underlying ideas. The simplest textbook trade model shows that a welfare-enhancing move toward freer flows of ideas should be associated with a reduction in conventional trade. The large quantitative effect from the flow of ideas is evident in the second half of the 20th century as the life expectancies in poor and rich countries began to converge. Another example comes from China, where authorities dramatically reduced accident rates by adopting rules of civil aviation that were developed in the United States. All economists, including trade economists, would be better equipped to talk about international flows of technologies and rules if they adopted a consistent vocabulary based on the concepts of nonrivalry and excludability. An analysis of the interaction between rules and technologies may help explain important puzzles such as why private firms have successfully diffused some technologies (mobile telephony) but not others (safe municipal water.)

Suggested Citation

  • Paul M. Romer, 2010. "Which Parts of Globalization Matter for Catch-up Growth?," NBER Working Papers 15755, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:15755
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    References listed on IDEAS

    1. Angus Deaton, 2004. "Health in an Age of Globalization," NBER Working Papers 10669, National Bureau of Economic Research, Inc.
    2. Di Tella, Rafael & Galiani, Sebastian & Schargrodsky, Ernesto, 2012. "Reality versus propaganda in the formation of beliefs about privatization," Journal of Public Economics, Elsevier, vol. 96(5), pages 553-567.
    3. François Bourguignon & Christian Morrisson, 2002. "Inequality Among World Citizens: 1820-1992," American Economic Review, American Economic Association, vol. 92(4), pages 727-744, September.
    4. Stanley Fischer, 2003. "Globalization and Its Challenges," American Economic Review, American Economic Association, vol. 93(2), pages 1-30, May.
    5. repec:pri:cheawb:deaton_healthglobalage.pdf is not listed on IDEAS
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    Cited by:

    1. Bulent Unel, 2013. "The Interaction Between Technology Adoption and Trade When Firms are Heterogeneous," Review of International Economics, Wiley Blackwell, vol. 21(4), pages 797-808, September.
    2. Amavilah, Voxi Heinrich, 2011. "Romer’s Charter Cities v. Colonization, Imperialism, and Colonialism: A General Characterization," MPRA Paper 29974, University Library of Munich, Germany.
    3. Amavilah, Voxi Heinrich, 2010. "Introducing Anthropological Foundations of Economic Behavior, Organization, and Control," MPRA Paper 22921, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • I1 - Health, Education, and Welfare - - Health
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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