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Economic Growth and Convergence Across the United States


Robert J. Barro


Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Xavier Sala-i-Martin


Columbia University, Graduate School of Arts and Sciences, Department of Economics

August 1990

NBER Working Paper No. w3419

Abstract:     
A key economic issue is whether poor countries or regions tend to grow faster than rich ones: are there automatic forces that lead to convergence over time in levels of per capita income and product? After considering predictions of closed- and open-economy neoclassical growth theories, we examine data since 1840 from the U.S. states. We find clear evidence of convergence, but the findings can be reconciled quantitatively with neoclassical models only if diminishing returns to capital set in very slowly. The results from a broad sample of countries are similar if we hold constant a set of variables that proxy for differences in steady-state characteristics. Two types of existing theories seem to fit the facts: the neoclassical growth model with broadly-defined capital and a limited role for diminishing returns, and endogenous growth models with constant returns and gradual diffusion of technology across economies.

Number of Pages in PDF File: 61

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Date posted: April 27, 2000  

Suggested Citation

Barro, Robert J. and Sala-i-Martin, Xavier, Economic Growth and Convergence Across the United States (August 1990). NBER Working Paper No. w3419. Available at SSRN: http://ssrn.com/abstract=226678

Contact Information

Robert J. Barro (Contact Author)
Harvard University - Department of Economics ( email )
Littauer Center
Cambridge, MA 02138
United States
617-495-3203 (Phone)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Francesc Xavier Sala-i-Martin
Columbia University, Graduate School of Arts and Sciences, Department of Economics ( email )
420 W. 118th Street
New York, NY 10027
United States
212-854-7055 (Phone)
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