Economic Transformation, Population Growth, and the Long-Run World Income Distribution

21 Pages Posted: 3 Mar 2006

See all articles by Marcos Chamon

Marcos Chamon

International Monetary Fund (IMF) - Research Department

Michael Kremer

Harvard University - Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER); Center for Global Development; Harvard University - Harvard Kennedy School (HKS)

Multiple version iconThere are 2 versions of this paper

Date Written: January 2006

Abstract

This paper considers the long-run evolution of the world economy in a model where countries' opportunities to develop depend on their trade with advanced economies. As developing countries become advanced, they further improve trade opportunities for the remaining developing countries. Whether or not the world economy converges to widespread prosperity depends on the population growth differential between developing and advanced economies, the rate at which countries develop, and potentially on initial conditions. A calibration using historical data suggests that the long-run prospects for lagging developing regions, such as Africa, likely hinge on the sufficiently rapid development of China and India.

Keywords: Population, growth, economic development, international trade

JEL Classification: J11, F43, O41

Suggested Citation

Chamon, Marcos and Kremer, Michael R., Economic Transformation, Population Growth, and the Long-Run World Income Distribution (January 2006). IMF Working Paper, Vol. , pp. 1-21, 2006. Available at SSRN: https://ssrn.com/abstract=888166

Marcos Chamon (Contact Author)

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Michael R. Kremer

Harvard University - Department of Economics ( email )

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