Global Income Divergence, Trade and Industrialization: The Geography of Growth Take-Offs

Richard Baldwin, Philippe Martin and Gianmarco Ottaviano

No 6458, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper takes a step towards formalizing the theoretical interconnections among four post-Industrial Revolution phenomena - the industrialization and growth take-off of rich northern' nations, massive global income divergence, and rapid trade expansion. Specifically, we present a stages-of-growth model in which the four phenomena are jointly endogenous and all are triggered by a gradual fall in the cost of doing business internationally. In the first stage, while trade costs are high, industry is dispersed and growth is low. In the second stage, the north industrializes rapidly, growth takes off and the south diverges. In the third stage, high growth becomes self sustaining. The model shows under which conditions, in a fourth stage, the south can quickly industrialize and converge.

Date: 1998-03
Note: ITI
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Published as Baldwin, Richard E., Philippe Martin and Gianmarco I. P. Ottaviano. "Global Income Divergence, Trade, And Industrialization: The Geography Of Growth Take-Offs," Journal of Economic Growth, 2001, v6(1,Mar), 5-37.

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Related works:
Chapter: Global Income Divergence, Trade, and Industrialization: The Geography of Growth Take-Offs (2021)
Journal Article: Global Income Divergence, Trade, and Industrialization: The Geography of Growth Take-Offs (2001)
Working Paper: Global Income Divergence, Trade, and Industrialization: The Geography of Growth Take-Offs (2001)
Working Paper: Global Income Divergence, Trade and Industrialization: The Geography of Growth Take-Offs (1998)
Working Paper: Global Income Divergence, Trade and Industrialisation: The Geography of Growth Take-Offs (1998)
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