Factor Mobility and Income Growth: Two Convergence Hypotheses

REVIEW OF DEVELOPMENT ECONOMICS

Posted: 24 Mar 1997

See all articles by Chi-Wa Yuen

Chi-Wa Yuen

The University of Hong Kong - School of Economics and Finance

Assaf Razin

Tel Aviv University - Eitan Berglas School of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

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Abstract

While technologies and policy fundamentals are presumably different internationally, inducing differences in growth rates, capital mobility can be a powerful force in equalizing output growth rates across countries. We provide some indirect evidence in support of this effect. In the context of regional growth, however, labor mobility can equalize income levels across regions in the presence of human capital externalities. Supporting evidence is found for this effect, revealing that restrictions on labor flows tend to make per capita incomes more divergent across nations and/or regions.

JEL Classification: F2, F4, O4

Suggested Citation

Yuen, Chi-Wa and Razin, Assaf, Factor Mobility and Income Growth: Two Convergence Hypotheses. REVIEW OF DEVELOPMENT ECONOMICS. Available at SSRN: https://ssrn.com/abstract=3825

Chi-Wa Yuen (Contact Author)

The University of Hong Kong - School of Economics and Finance ( email )

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Assaf Razin

Tel Aviv University - Eitan Berglas School of Economics ( email )

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Israel
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National Bureau of Economic Research (NBER) ( email )

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CESifo (Center for Economic Studies and Ifo Institute)

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Germany

HOME PAGE: http://www.CESifo.de

Centre for Economic Policy Research (CEPR)

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United Kingdom

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