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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/25788
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| Title: | | Evidence and implications of Zipf's aw for integrated economies  |
| Authors: | | Bowen, Harry P. Munandar, Haris Viaene, Jean-Marie |
| Issue Date: | | 2006 |
| Series/Report no.: | | CESifo working paper 1743 |
| Abstract: | | This paper considers the distribution of output and productive factors among members of a fully integrated economy (FIE). We demonstrate that each members shares of total output and of total factors will be equal. This implies that growth in shares is random. If output and factor shares evolve as reflective geometric Brownian motion, then limiting distribution of these shares will exhibit Zipfs law. Our empirics support Zipfs law for U.S. states and for E.U. countries. These findings imply that models characterizing growth of members within an FIE should embody a key assumption: growth process of shares is random and homogeneous. |
| JEL: | | E13 F15 F21 F22 O57 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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