Can the Poor Countries Catch Up? Mixed Results from Extended Sources of Growth Projections for the Early 21st Century

28 Pages Posted: 9 Feb 2007

See all articles by Lance Taylor

Lance Taylor

The New School - Bernard Schwartz Center for Economic Policy Analysis (CEPA)

Codrina Rada

The New School - Department of Economics

Abstract

Illustrative projections of per capita income gaps between two groups of developing economies and the rich economies for the period 1998-2030 are made on the basis of an extended sources of growth equation which accounts for interactions between trends in capital and labor productivity. The equation takes into consideration Kaldor-Verdoorn effects, possible impacts on labor productivity of trade liberalization and/or astute industrial policy, human and physical capital accumulation, employment and population growth, shifting shares of labor in income and traded goods in output, shifts in capital productivity, productivity growth retardation due to convergence and specific regional effects. Under optimistic assumptions about all these factors and in the historically unprecedented absence of adverse macroeconomic shocks over three decades, relative and absolute convergence of both regions to the rich countries may be possible.

Suggested Citation

Taylor, Lance and Rada, Codrina, Can the Poor Countries Catch Up? Mixed Results from Extended Sources of Growth Projections for the Early 21st Century. Metroeconomica, Vol. 58, No. 1, pp. 127-154, February 2007, Available at SSRN: https://ssrn.com/abstract=962212 or http://dx.doi.org/10.1111/j.1467-999X.2007.00263.x

Lance Taylor

The New School - Bernard Schwartz Center for Economic Policy Analysis (CEPA) ( email )

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5th Floor
New York, NY 10027
United States

Codrina Rada (Contact Author)

The New School - Department of Economics ( email )

65 Fifth Avenue
New York, NY 10003
United States

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