Convergence in an Open-Economy Growth Model
M. Frith and
CEPR Discussion Papers from Centre for Economic Policy Research, Research School of Economics, Australian National University
This paper reviews the origins of the 2 per percent rule, arguing that existing evidence for the rule is not as strong as is often supposed and that in any case it can be a misleading guide to the payoff period in policy applications. In the context of a postulated change in the rate of increase of total factor productivity, we show that the convergence speed of the former growth rate is markedly slower than the latter.
Keywords: PRODUCTIVITY; GROWTH MODELS; ECONOMIC DEVELOPMENT (search for similar items in EconPapers)
JEL-codes: D24 J24 (search for similar items in EconPapers)
Pages: 27 pages
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Journal Article: Convergence in an open-economy growth model (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:auu:dpaper:392
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