Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
9732042 | Review of Economic Dynamics | 2005 | 36 Pages |
Abstract
This paper investigates whether technological shocks, constructed to be consistent with the observed cross-country income dispersion, are also capable of accounting for development regularities related to capital accumulation. This question is approached via a quantitative theoretical analysis of an integrated world economy model. An open economy framework constrains country heterogeneity to be consistent with international capital flows. Moreover, it enables the study of distinctively open economy development facts. The model produces time-invariant cross-sectional distributions for development variables, whose properties are quantitatively compared with the Penn World Table data set. The model generates too little dispersion in capital-output ratios and investment rates. However, it is consistent with the relative importance of investment, saving, and international capital flows for economic development.
Keywords
Related Topics
Social Sciences and Humanities
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Economics and Econometrics
Authors
Rui Castro,