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http://hdl.handle.net/10419/3878
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| Title: | | The Solow model in the empirics of growth and trade  |
| Authors: | | Gundlach, Erich |
| Issue Date: | | 2006 |
| Series/Report no.: | | Kieler Arbeitspapiere 1294 |
| Abstract: | | Translated to a cross-country context, the Solow model (Solow, 1956) predicts that international differences in steady state output per person are due to international differences in technology for a constant capital output ratio. However, most of the cross-country growth literature that refers to the Solow model has employed a specification where steady state differences in output per person are due to international differences in the capital output ratio for a constant level of technology. My empirical results show that the former specification can summarize the data quite well by using a measure of institutional technology and treating the capital output ratio as part of the regression constant. This reinterpretation of the cross-country Solow model provides an interesting implication for empirical studies of international trade. Harrod-neutral technology differences as presumed by the Solow model can explain why countries have different factor intensities and may end up in different cones of specialization. |
| Subjects: | | Solow Model Lerner diagram |
| JEL: | | O40 F11 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des IfW Economists Online Kieler Arbeitspapiere, IfW
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