From Which Side to the Steady State of the Augmented Solow Model? The Role of Country-Specific Total Factor Productivity Growth Rates

Hollanders, Hugo and Ziesemer, Thomas (1999). From Which Side to the Steady State of the Augmented Solow Model? The Role of Country-Specific Total Factor Productivity Growth Rates. UNU-MERIT Research Memoranda. UNU-MERIT.

Document type:
Report

Metadata
Documents
Versions
Statistics
  • Attached Files (Some files may be inaccessible until you login with your UNU Collections credentials)
    Name Description MIMEType Size Downloads
    rm1999-003.pdf PDF application/pdf 227.60KB
  • Sub-type Working paper
    Author Hollanders, Hugo
    Ziesemer, Thomas
    Title From Which Side to the Steady State of the Augmented Solow Model? The Role of Country-Specific Total Factor Productivity Growth Rates
    Series Title UNU-MERIT Research Memoranda
    Volume/Issue No. 3
    Publication Date 1999
    Publisher UNU-MERIT
    Language eng
    Abstract The human capital-augmented Solow model (Mankiw et al., 1992) has been criticized by Cho and Graham (1996) by stating that half of all countries converge to their steady state from above, i.e. from income levels above those obtained in their steady state. This is clearly at odds with the general idea that countries approach their steady state from a backward position. In this paper we will argue that this result is primarily due to the assumption of an identical exogenous rate of technological progress for all countries. Once different rates of technological progress are introduced into the model, the number of countries approaching their steady state from above is reduced to a number more in line with what the augmented Solow model would predict. However, for a sample consisting of 98 non-oil countries, the assumption of constant returns to scale has to be rejected. For the non-oil sample our analysis thus both supports and challenges the human capital-augmented Solow model. For a more limited sample consisting of 22 OECD countries, the results clearly support the augmented Solow model by both reducing the number of countries converging from above their steady state to zero and by accepting the assumption of constant returns to scale.
    Copyright Year 1999
    Copyright type All rights reserved
  • Versions
    Version Filter Type
  • Citation counts
    Google Scholar Search Google Scholar
    Access Statistics: 403 Abstract Views, 54 File Downloads  -  Detailed Statistics
    Created: Fri, 13 Dec 2013, 13:02:12 JST