Convergence and Growth Linkages Between North and South / John F. Helliwell, Alan Chung.

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Helliwell, John F

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w3948.Publication details: Cambridge, Mass. National Bureau of Economic Research 1992.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: Using cross-sectional data for 98 countries for 1960-85, this paper shows that growth of per capita GDP depends negatively on initial income levels, as implied by the convergence hypothesis, as well as on international differences in investment rates in physical and human capital. There is some evidence of slight economies of scale (1.06) among the industrial countries. The evidence in favor of the convergence hypothesis is strongest for the countries of the OECD and Latin America, and weakest for Asia. Growth in Latin America and Africa is lower than elsewhere even after allowing for international differences in initial income levels, scale, schooling and capital investment. Analysis of Solow residuals for the OECD countries (for which capital stock data are available) shows convergence in rates of technical progress, suggesting that convergence of per capita GDPs is not Just a function of differences in investment rates. The linkage between per capita GDP and the real exchange rate is found to be strong for the OECD and Asia, weak for Africa and negative for Latin America.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w3948 (Browse shelf(Opens below))	Not For Loan

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January 1992.

Using cross-sectional data for 98 countries for 1960-85, this paper shows that growth of per capita GDP depends negatively on initial income levels, as implied by the convergence hypothesis, as well as on international differences in investment rates in physical and human capital. There is some evidence of slight economies of scale (1.06) among the industrial countries. The evidence in favor of the convergence hypothesis is strongest for the countries of the OECD and Latin America, and weakest for Asia. Growth in Latin America and Africa is lower than elsewhere even after allowing for international differences in initial income levels, scale, schooling and capital investment. Analysis of Solow residuals for the OECD countries (for which capital stock data are available) shows convergence in rates of technical progress, suggesting that convergence of per capita GDPs is not Just a function of differences in investment rates. The linkage between per capita GDP and the real exchange rate is found to be strong for the OECD and Asia, weak for Africa and negative for Latin America.