Endogenous Growth and Cross-Country Income Differences

Peter Howitt ()

American Economic Review, 2000, vol. 90, issue 4, 829-846

Abstract: A multicountry Schumpeterian growth model is constructed. Because of technology transfer, R&D-performing countries converge to parallel growth paths; other countries stagnate. A parameter change that would have raised a country's growth rate in standard Schumpetarian theory will permanently raise its productivity and per capita income relative to other countries and raise the world growth rate. Transitional dynamics are analyzed for each country and for the world economy. Steady-state income differences obey the same equation as in neoclassical theory, but since R&D is positively correlated with investment rates, capital accumulation accounts for less than estimated by neoclassical theory.

JEL-codes: B52 O33 O41 (search for similar items in EconPapers)
Date: 2000
Note: DOI: 10.1257/aer.90.4.829
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Citations: View citations in EconPapers (356)

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