Only income diverges: A neoclassical anomaly

Kevin Grier; Robin Grier

doi:10.1016/j.jdeveco.2006.12.004

Only income diverges: A neoclassical anomaly

Kevin Grier, Robin Grier

Research output: Contribution to journal › Article › peer-review

20 Scopus citations

Abstract

The neoclassical growth model (NGM) is only consistent with the absolute divergence in output levels we observe if some determinants of steady state income are also diverging. In this paper we show that accumulation rates of physical and human capital are actually significantly converging, as are openness to trade and several variables measuring institutional quality. Output divergence in the face of input, policy and institutional convergence is a deep anomaly for the NGM.

Original language	English
Pages (from-to)	25-45
Number of pages	21
Journal	Journal of Development Economics
Volume	84
Issue number	1
DOIs	https://doi.org/10.1016/j.jdeveco.2006.12.004
State	Published - Sep 2007

Keywords

Convergence
Economic growth

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10.1016/j.jdeveco.2006.12.004

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title = "Only income diverges: A neoclassical anomaly",

abstract = "The neoclassical growth model (NGM) is only consistent with the absolute divergence in output levels we observe if some determinants of steady state income are also diverging. In this paper we show that accumulation rates of physical and human capital are actually significantly converging, as are openness to trade and several variables measuring institutional quality. Output divergence in the face of input, policy and institutional convergence is a deep anomaly for the NGM.",

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AB - The neoclassical growth model (NGM) is only consistent with the absolute divergence in output levels we observe if some determinants of steady state income are also diverging. In this paper we show that accumulation rates of physical and human capital are actually significantly converging, as are openness to trade and several variables measuring institutional quality. Output divergence in the face of input, policy and institutional convergence is a deep anomaly for the NGM.

KW - Convergence

KW - Economic growth

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Only income diverges: A neoclassical anomaly

Abstract

Keywords

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