Factor Mobility and Income Growth: Two Convergence Hypotheses / Assaf Razin, Chi-Wa Yuen.

By:

Razin, Assaf

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w5135.Publication details: Cambridge, Mass. National Bureau of Economic Research 1995.Description: 1 online resource: illustrations (black and white)Subject(s):

F0 - General

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Abstract: While technologies and policy fundamentals are presumably different internationally, inducing differences in growth rates, capital mobility is shown to be a powerful force in achieving complete growth rate equalization across countries. We provide evidence in support of this effect, showing that restrictions on capital flows tend to make individual country growth rates more divergent. In the context of regional growth, however, labor mobility is shown to be capable of generating income level equalization across regions in the presence of knowledge spillovers. Some supporting evidence is found for this effect, showing that restrictions on labor flows tend to make individual region/country per capita income more divergent.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w5135 (Browse shelf(Opens below))	Not For Loan

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Previous	nber w5132 The Law of One Price Over 700 Years /	nber w5133 Measuring Gross Worker and Job Flows /	nber w5134 The Relationship between State and Federal Tax Audits /	nber w5135 Factor Mobility and Income Growth: Two Convergence Hypotheses /	nber w5136 How Does Privatization Work? Evidence from the Russian Shops /	nber w5137 Do Labor Rents Justify Strategic Trade and Industrial Policy? /	nber w5138 How Much Better is Bigger, Faster & Cheaper? Buyer Benefits from Innovation in Mainframe Computers in the 1980s /	Next

May 1995.

While technologies and policy fundamentals are presumably different internationally, inducing differences in growth rates, capital mobility is shown to be a powerful force in achieving complete growth rate equalization across countries. We provide evidence in support of this effect, showing that restrictions on capital flows tend to make individual country growth rates more divergent. In the context of regional growth, however, labor mobility is shown to be capable of generating income level equalization across regions in the presence of knowledge spillovers. Some supporting evidence is found for this effect, showing that restrictions on labor flows tend to make individual region/country per capita income more divergent.