Growth in Open Economies

Sergio Rebelo ()

No 667, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper provides a survey of recent growth models that attempt to explain the cross-country diversity in rates of economic growth. It shows that these models can only generate differences in growth rates in the absence of international capital markets. With free international capital mobility they imply that the growth rate of consumption and GNP would be quickly equalized all over the world. This paper describes a simple modification of standard preferences that eliminates this implausible growth-equalization result and is consistent with the fact that the savings rate is lower in poor countries than in rich countries.

Keywords: Growth; Open Economy; Savings Rate (search for similar items in EconPapers)
JEL-codes: E21 F43 O49 (search for similar items in EconPapers)
Date: 1992-06
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Citations: View citations in EconPapers (90)

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Journal Article: Growth in open economies (1992)
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