We wish to thank two referees of this journal for valuable comments. We also acknowledge helpful suggestions of the participants at the University of New Hampshire seminar. The usual disclaimer applies.
A MODEL OF GROWTH AND CONVERGENCE IN THE PRESENCE OF INPUT-ENHANCING FACTORS: AN EMPIRICAL STUDY
Version of Record online: 26 MAR 2007
Volume 40, Issue 2, pages 158–165, April 2002
How to Cite
Panik, M. J. and Rassekh, F. (2002), A MODEL OF GROWTH AND CONVERGENCE IN THE PRESENCE OF INPUT-ENHANCING FACTORS: AN EMPIRICAL STUDY. Economic Inquiry, 40: 158–165. doi: 10.1093/ei/40.2.158
- Issue online: 26 MAR 2007
- Version of Record online: 26 MAR 2007
We introduce and estimate a growth model involving non-neutral technical change characterized by the presence of input-enhancing factors that vary across countries and serve to offset (and potentially eliminate) diminishing returns to capital. Our empirical results, however, indicate that diminishing returns to capital proves too strong to be overcome by, say, capital-enhancing factors. Consequently, our model predicts a conditional convergence of output per worker across countries, with the speed of convergence being slower than that found in earlier models involving neutral technical change.