LONG-RUNG POLICY ANALYSIS AND LONG-RUN GROWTH

In: Journal of political economy, Band 99, Heft 3, S. 500-521

Abstract

THE WIDE CROSS-COUNTRY DISPARITY IN RATES OF ECONOMIC GROWTH IS THE MOST PUZZLING FEATURE OF THE DEVELOPMENT PROCESS. THIS PAPER DESCRIBES A CLASS OF MODELS IN WHICH THIS HETEROGENEITY IN GROWTH EXPERIENCES CAN BE THE RESULT OF CROSS-COUNTRY DIFFERENCES IN GOVERNMENT POLICY. THESE DIFFERENCES CAN ALSO CREATE INCENTIVES OF LABOR MIGRATION FROM SLOW-GROWING TO FAST-GROWING COUNTRIES. IN THE MODELS CONSIDERED, GROWTH IS ENDOGENOUS DESPITE THE ABSENCE OF INCREASING RETURNS BECAUSE THERE IS A "CORE" OF CAPITAL GOODS THAT CAN BE PRODUCED WITHOUT THE DIRECT OR INDIRECT CONTRIBUTION OF FACTORS THAT CANNOT BE ACCUMULATED, SUCH AS LAND.