Empirical Evidence for the Endogenous Growth Generated by Evolution in Division of Labor

Been-Lon Chen (), Lin, C.-F. J. and Xiaokai Yang

Working Papers from Harvard - Institute for International Development

Abstract: Following up the empirical works of Jones (1995a,b) that reject two classes of the major endogenous growth models: the AK models and R&D based models, the paper tests the third class of endogenous growth models that generate endogenous evolution in division of labor against empirical data. It is shown that this class of endogenous growth models not only avoid scale effects, but also accommodate both convergence and divergence phenomena. One of the hypotheses generated by this class of endogenous growth models is that the divergence phenomenon takes place first between each pair of economies that enter the take off stage at different points in time, then the convergence phenomenon follows. This implies that the difference in per capita real income between the two economies is an inverse U shape curve. The empirical data strongly support the hypothesis.

Keywords: ECONOMIC GROWTH; EVOLUTION; LABOUR (search for similar items in EconPapers)
JEL-codes: E24 J20 O40 (search for similar items in EconPapers)
Date: 1999
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