Industrial Development and the Convergence Question

Federal Reserve Bank of Richmond, Working Paper No. 99-1

35 Pages Posted: 24 Mar 1999

See all articles by Marvin Goodfriend

Marvin Goodfriend

Carnegie Mellon University - David A. Tepper School of Business; National Bureau of Economic Research (NBER)

John McDermott

University of South Carolina - Moore School of Business - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: December 1998

Abstract

The paper studies endogenous world balanced growth equilibria in which national learning productivity differentials govern relative per capita products. Learning productivities depend on the national share of world specialized goods production, national and world scale, and familiarity with the foreign economy. Familiarity indexes the extent to which imported specialized goods enhance learning productivity. We find that mutual familarization causes per capita products to converge. Unfamiliar economies diverge substantially and persistently. Unilateral familiarization of a less-developed country (LDC) with the leading economy causes the LDC to catch up to, and even overtake, the leader.

JEL Classification: F43, N1, 011

Suggested Citation

Goodfriend, Marvin and McDermott, John H., Industrial Development and the Convergence Question (December 1998). Federal Reserve Bank of Richmond, Working Paper No. 99-1. Available at SSRN: https://ssrn.com/abstract=153508 or http://dx.doi.org/10.2139/ssrn.153508

Marvin Goodfriend (Contact Author)

Carnegie Mellon University - David A. Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

John H. McDermott

University of South Carolina - Moore School of Business - Department of Economics ( email )

The Francis M. Hipp Building
1705 College Street
Columbia, SC 29208
United States

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