South-North convergence from a new perspective

Michael Hübler

No 13-104, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: This North-South model of Schumpeterian endogenous growth combines a market, productivity and knowledge effect. A set of various convergent and divergent growth paths is derived that is much richer than in the literature so far. South-North convergence based on North-South technology diffusion through intermediate goods trade is guaranteed if the knowledge effect dominates the productivity effect. Moreover, a larger Southern market expands the area of convergence and can prevent divergence. Not only a larger Southern market size, but also a higher Southern steady state growth rate benefit the North so that convergence is desirable for both, the South and the North.

Keywords: Schumpeter; endogenous growth; technology diffusion; convergence; poverty trap (search for similar items in EconPapers)
JEL-codes: F18 O11 O33 O41 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-fdg, nep-mac and nep-pbe
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:13104

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