Convergence in an Open-Economy Growth Model

B. Bourdot, M. Frith and Graeme Wells

CEPR Discussion Papers from Centre for Economic Policy Research, Research School of Economics, Australian National University

Abstract: 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
Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:auu:dpaper:392

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