Paths of development in open economies: the role of land
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Title: | Paths of development in open economies: the role of land |
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Authors: | Guillo, Maria Dolores | Pérez Sebastián, Fidel |
Research Group/s: | Grupo de Estudios de Paz y Desarrollo (GEPYD) | Análisis Económico |
Center, Department or Service: | Universidad de Alicante. Departamento de Métodos Cuantitativos y Teoría Económica | Universidad de Alicante. Departamento de Fundamentos del Análisis Económico |
Keywords: | Land | Two-sector growth model | Open economies |
Knowledge Area: | Fundamentos del Análisis Económico |
Issue Date: | Mar-2005 |
Publisher: | Fundación de Estudios de Economía Aplicada (FEDEA) | Asociación Española de Economía y Finanzas Internacionales |
Citation: | GUILLÓ, María Dolores; PÉREZ-SEBASTIÁN, Fidel. “Paths of development in open economies: the role of land”. Documentos de Economía y Finanzas Internacionales. DEFI 05/04. ISSN 1696-6376 |
Abstract: | This paper shows, within a Heckscher-Ohlin version of the two-sector neoclassical growth model, that land, besides having long-run effects, is also a main determinant of the speed of convergence toward the steady state when there are cross-sector capital share differences. This result stands in sharp contrast to the predictions of standard neoclassical growth frameworks, and calls for a reinterpretation of the conditional-convergence and the resource-curse findings. More specifically, the model predicts that the former finding requires the existence not only of diminishing returns but also of relatively small differences in capital shares across sectors. With respect to the latter finding, our results imply that it may be a consequence of purely transitional effects of natural riches on growth, and that it cannot be interpreted as evidence that natural inputs necessarily harm long-run welfare. We produce empirical evidence on the relationship between land, income levels, and growth rates, and present data on cross-sector capital shares. We claim that most of that evidence is consistent with the predictions of the model. |
URI: | http://hdl.handle.net/10045/23684 |
ISSN: | 1696-6376 |
Language: | eng |
Type: | info:eu-repo/semantics/workingPaper |
Peer Review: | si |
Appears in Collections: | INV - GEPYD - Working Papers INV - Análisis Económico - Working Papers INV - DMCTE - Working Papers |
Files in This Item:
File | Description | Size | Format | |
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2005_Guillo_PerezSebastian_DEFI.pdf | 453,79 kB | Adobe PDF | Open Preview | |
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