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

Jonathan Temple and Bryan Graham

No 3046, CEPR Discussion Papers from Centre for Economic Policy Research

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 analyse 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: Multiple equilibria; Poverty traps; World income distribution (search for similar items in EconPapers)
JEL-codes: O11 (search for similar items in EconPapers)
Date: 2001-11
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Citations: View citations in EconPapers (16)

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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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