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The Generalized Neoclassical Growth Model

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  • Alejandro Cunat
  • Marco Maffezzoli

Abstract

We construct and numerically solve a dynamic Hechscher-Ohlin model which, depending on the distribution of production factors in the world and parameter values, allows for worldwide factor price equalization or complete specialization. We explore the dynamics of the model under different parameter values, and relate our theoretical results to the empirical literature that studies the determinants of countries' income per capita growth and levels. In general, the model is capable of generating predictions in accordance with the most important findings in the empirical growth literature. At the same time, it avoids some of the most serious problems of the (autarkic) neoclassical growth model.

Suggested Citation

  • Alejandro Cunat & Marco Maffezzoli, 2003. "The Generalized Neoclassical Growth Model," Working Papers 231, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  • Handle: RePEc:igi:igierp:231
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    References listed on IDEAS

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    5. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    6. Alan V. Deardorff, 2011. "Rich And Poor Countries In Neoclassical Trade And Growth," World Scientific Book Chapters, in: Robert M Stern (ed.), Comparative Advantage, Growth, And The Gains From Trade And Globalization A Festschrift in Honor of Alan V Deardorff, chapter 25, pages 295-313, World Scientific Publishing Co. Pte. Ltd..
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    Cited by:

    1. Kevin H. O'Rourke & Ahmed S. Rahman & Alan M. Taylor, 2007. "Trade, Knowledge and the Industrial Revolution," Development Working Papers 230, Centro Studi Luca d'Agliano, University of Milano.

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