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CAN THE POOR COUNTRIES CATCH UP? MIXED RESULTS FROM EXTENDED SOURCES OF GROWTH PROJECTIONS FOR THE EARLY 21st CENTURY

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  • Lance Taylor
  • Codrina Rada

Abstract

Illustrative projections of per capita income gaps between two groups of developing economies and the rich economies for the period 1998–2030 are made on the basis of an extended sources of growth equation which accounts for interactions between trends in capital and labor productivity. The equation takes into consideration Kaldor–Verdoorn effects, possible impacts on labor productivity of trade liberalization and/or astute industrial policy, human and physical capital accumulation, employment and population growth, shifting shares of labor in income and traded goods in output, shifts in capital productivity, productivity growth retardation due to convergence and specific regional effects. Under optimistic assumptions about all these factors and in the historically unprecedented absence of adverse macroeconomic shocks over three decades, relative and absolute convergence of both regions to the rich countries may be possible.

Suggested Citation

  • Lance Taylor & Codrina Rada, 2007. "CAN THE POOR COUNTRIES CATCH UP? MIXED RESULTS FROM EXTENDED SOURCES OF GROWTH PROJECTIONS FOR THE EARLY 21st CENTURY," Metroeconomica, Wiley Blackwell, vol. 58(1), pages 127-154, February.
    • Handle: RePEc:bla:metroe:v:58:y:2007:i:1:p:127-154
    DOI: 10.1111/j.1467-999X.2007.00263.x
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    References listed on IDEAS

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    1. Robert E. Lucas, 2000. "Some Macroeconomics for the 21st Century," Journal of Economic Perspectives, American Economic Association, vol. 14(1), pages 159-168, Winter.
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    Cited by:

    1. Codrina Rada & Lance Taylor, 2006. "Developing and Transition Economies in the Late 20th Century: Diverging Growth Rates, Economic Structures, and Sources of Demand," Working Papers 34, United Nations, Department of Economics and Social Affairs.

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