Rich nations, poor nations: how much can multiple equilibria explain?

Bryan Graham and Jonathan Temple

The Institute for International Integration Studies Discussion Paper Series from IIIS

Abstract: This paper asks whether the income gap between rich and poor nations can be explained by multiple equilibria. We explore the quantitative implications of a simple two sector general equilibrium model that gives rise to multiplicity, and calibrate the model for a large number of countries. Under the assumptions of the model, around a quarter of the world’s economies are found to be in a low output equilibrium. The output gains associated with an equilibrium switch are sizeable, but well short of the vast income disparity observed in the data.

Keywords: poverty traps; multiple equilibria; TFP differences; calibration (search for similar items in EconPapers)
Date: 2004-01-01
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Citations: View citations in EconPapers (55)

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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? (2002)
Working Paper: Rich Nations, Poor Nations: How Much Can Multiple Equilibria Explain? (2001)
Working Paper: Rich Nations, Poor Nations: How Much can Multiple Equilibria Explain? (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:iis:dispap:iiisdp017

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