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Endogenous Growth and Exogenous Shocks in Latin America during the Twentieth Century

Author

Listed:
  • Pablo Astorga

    () (Latin American Centre, St Antony’s College, Oxford)

  • Ame E. Bergés
  • Valpy Fitzgerald

Abstract

Using a new database for the whole 1900–2000 period, this paper estimates the relative contribution of endogenous and exogenous factors in GDP and productivity growth in each of the six larger Latin American economies with multivariate annual models, and complements these with a single aggregate model using panel data by decade to test for convergence within the region and with the US. Our method is innovative as it includes external economic shocks as well as endogenous growth variables. The main findings are: (i) that investment contributed most to growth during the middle of the century when the region was relatively closed to the world economy and state was proactive; (ii) that the six main economies did converge considerably over the century due to improvements in resource allocation, advances in health and education and increased investment effort; (iii) that these improvements were not, however, enough to produce convergence between Latin America and US; and (iv) that terms of trade volatility, trade and interest rate shocks were major obstacle to both sustained economic growth and catching up.

Suggested Citation

  • Pablo Astorga & Ame E. Bergés & Valpy Fitzgerald, 2005. "Endogenous Growth and Exogenous Shocks in Latin America during the Twentieth Century," Oxford University Economic and Social History Series _057, Economics Group, Nuffield College, University of Oxford.
  • Handle: RePEc:nuf:esohwp:_057
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    File URL: http://www.economics.ox.ac.uk/materials/papers/2293/57astorga.pdf
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    References listed on IDEAS

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    Cited by:

    1. Artelaris, Panagiotis & Arvanitidis, Paschalis & Petrakos, George, 2006. "Theoretical and Methodological Study on Dynamic Growth Regions and Factors Explaining their Growth Performance," Papers DYNREG02, Economic and Social Research Institute (ESRI).
    2. Prados de la Escosura, Leandro, 2005. "Growth, inequality, and poverty in Latin America: historical evidence, controlled conjectures," IFCS - Working Papers in Economic History.WH wh054104, Universidad Carlos III de Madrid. Instituto Figuerola.
    3. Valpy FitzGerald, 2008. "Economic development and fluctuations in earnings inequality in the very long run: The evidence from Latin America 1900-2000," Journal of International Development, John Wiley & Sons, Ltd., vol. 20(8), pages 1028-1048.
    4. Antonio E. Noriega & Cid Alonso Rodríguez-Pérez, 2011. "Stationarity, structural breaks, and economic growth in Mexico: 1895-2008," Working Papers 2011-11, Banco de México.

    More about this item

    Keywords

    Economic History; Economic Growth; Latin America;

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • N16 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Latin America; Caribbean

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