Paths of development for early- and late-bloomers in a dynamic Heckscher-Ohlin model

Andrew Atkeson and Patrick Kehoe

No 256, Staff Report from Federal Reserve Bank of Minneapolis

Abstract: We show that in a dynamic Heckscher-Ohlin model the timing of a country?s development relative to the rest of the world affects the path of the country?s development. A country that begins the development process later than most of the rest of the world?a late-bloomer?ends up with a permanently lower level of income than the early-blooming countries that developed earlier. This is true even though the late-bloomer has the same preferences, technology, and initial capital stock that the early-bloomers had when they started the process of development. This result stands in stark contrast to that of the standard one-sector growth model in which identical countries converge to a unique steady state, regardless of when they start to develop.

Keywords: Economic; development (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (55)

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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmsr:256

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