Rich Nations, Poor Nations: How Much Can Multiple Equilibria Explain?

Bryan Graham and Jonathan Temple

No 76A, CID Working Papers from Center for International Development at Harvard University

Abstract: The idea that income differences between rich and poor nations arise through multiple equilibria or 'poverty traps' is as intuitive as it is difficult to verify. In this paper, we explore the empirical relevance of such models. We calibrate a simple two sector model for 127 countries, and use the results to analyze the international prevalence of poverty traps and their consequences for productivity. We also examine the possible effects of multiplicity on the world distribution of income, and identify events in the data that may correspond to equilibrium switching.

Keywords: poverty traps; multiple equilibria; 'Big Push'; TFP differences; calibration methods (search for similar items in EconPapers)
JEL-codes: C00 O14 O41 O47 (search for similar items in EconPapers)
Date: 2001-09
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Citations: View citations in EconPapers (15)

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Related works:
Journal Article: Rich Nations, Poor Nations: How Much Can Multiple Equilibria Explain? (2006)
Working Paper: Rich nations, poor nations: how much can multiple equilibria explain? (2004)
Working Paper: Rich Nations, Poor Nations: How much can multiple equilibria explain? (2002)
Working Paper: Rich Nations, Poor Nations: How Much can Multiple Equilibria Explain? (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:cid:wpfacu:76a

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