Convergence behaviour in exogenous growth models

Jochonia Mathunjwa and Jonathan Temple

Bristol Economics Discussion Papers from School of Economics, University of Bristol, UK

Abstract: This paper analyzes several aspects of convergence behaviour in the Solow growth model. In empirical work, a popular approach is to log-linearize around the steady-state. We investigate the conditions under which this approximation performs well, and discuss convergence behaviour when an economy is some distance from the steady-state. A formal analysis shows that convergence speeds will be heterogeneous across countries and over time. In particular, the Solow model implies that convergence to a growth path from above is slower than convergence from below. We find some support for this prediction in the data.

Keywords: convergence; economic growth; Solow model (search for similar items in EconPapers)
JEL-codes: O41 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2006-08
New Economics Papers: this item is included in nep-dev and nep-dge
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:bri:uobdis:06/590

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