Location and the growth of nations

Ramon Moreno and Bharat Trehan ()

No 97-02, Working Papers in Applied Economic Theory from Federal Reserve Bank of San Francisco

Abstract: Does a country's (long-term) growth depend upon what happens in countries that are nearby? Such linkages could occur for a variety of reasons, including demand and technology spillovers. We present a series of tests to determine the existence of such relationships and the forms that they might take. We find that a country's growth rate is closely related to that of nearby countries, and show that this correlation reflects more that the existence of common shocks. Trade alone does not appear responsible for these linkages either. In addition, we find that being near a large market contributes to growth.

Keywords: Economic; development (search for similar items in EconPapers)
Date: 1997
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