Can transition dynamics explain the international output data?

  1. Papageorgiou, Chris
  2. Pérez Sebastián, Fidel
Revista:
Working papers = Documentos de trabajo: Serie AD

Año de publicación: 2001

Número: 2

Tipo: Documento de Trabajo

Resumen

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.