Paths of Development for Early- and Late-Bloomers in a Dynamic Heckscher-Ohlin Model

Posted: 19 Aug 2008

See all articles by Andrew Atkeson

Andrew Atkeson

University of California, Los Angeles (UCLA) - Department of Economics; National Bureau of Economic Research (NBER)

Patrick J. Kehoe

Federal Reserve Bank of Minneapolis - Research Department; University of Minnesota - Twin Cities - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: October 1998

Abstract

We show that in a dynamic Heckscher-Ohlin model the timing of a country's development relative to the rest of the world affects the path of the country's development. A country that begins the development process later than most of the rest of the world-a late-bloomer-ends up with a permanently lower level of income than the early-blooming countries that developed earlier. This is true even though the late-bloomer has the same preferences, technology, and initial capital stock that the early-bloomers had when they started the process of development. This result stands in stark contrast to that of the standard one-sector growth model in which identical countries converge to a unique steady state, regardless of when they start to develop.

Keywords: Two Sector Growth Models, Convergence Trade and Growth

JEL Classification: F11, O11, O41

Suggested Citation

Atkeson, Andrew G. and Kehoe, Patrick J., Paths of Development for Early- and Late-Bloomers in a Dynamic Heckscher-Ohlin Model (October 1998). Available at SSRN: https://ssrn.com/abstract=1229262

Andrew G. Atkeson (Contact Author)

University of California, Los Angeles (UCLA) - Department of Economics ( email )

Box 951477
Los Angeles, CA 90095-1477
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Patrick J. Kehoe

Federal Reserve Bank of Minneapolis - Research Department ( email )

90 Hennepin Avenue
Minneapolis, MN 55480
United States
612-204-5525 (Phone)
612-204-5515 (Fax)

University of Minnesota - Twin Cities - Department of Economics ( email )

271 19th Avenue South
Minneapolis, MN 55455
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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