Article ID Journal Published Year Pages File Type
9732042 Review of Economic Dynamics 2005 36 Pages PDF
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.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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