Barriers and the transition to modern growth

L. Rachel Ngai

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper studies how differences in the size of barriers to capital accumulation can account for differences in long run economic development paths. In this model barriers affect both the beginning date and the pace of the modern economic growth. A fundamental property of the model is that cross-country income differences matches the inverted U-shape pattern over time as observed in the data, hence implies a substantial fraction of existing income differences is really a transitional phenomeno n. Relative to papers that model this as steady state phenomenon, my model requires a smaller size of barriers to account for current disparities. Another important finding is that this transitional effect increases significantly when I include the fact that today's low-income countries have had higher population growth rates during their early development stage than did the currently rich countries. In a quantitative exercise I find that given the beginning dates of modern growth, the model accounts for a significant portion of current income differences.

Keywords: Industrialization; income disparity; distortion (search for similar items in EconPapers)
JEL-codes: D58 O11 O14 O42 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2003-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://eprints.lse.ac.uk/3530/ Open access version. (application/pdf)

Related works:
Journal Article: Barriers and the transition to modern growth (2004)
Working Paper: Barriers and the Transition to Modern Growth (2003)
Working Paper: Barriers and the Transition to Modern Growth (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:3530

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