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Global Divergence in Growth Regressions

Author

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  • Zeira, Joseph
  • di Vaio, Gianfranco
  • Battisti, Michele
Abstract
This paper extends the standard growth regression model by adding an assumption that a country follows the global technology frontier either fully or partially. This additional assumption changes significantly the growth regression model and its results in three main ways. First, it shows that although a country converges to its long-run growth path, this path can diverge from the countries at the global frontier. We measure the degree of divergence for each country and find that most indeed diverge from the frontier. Second, we estimate growth dynamics without controlling for additional variables. Third, our new method enables us to disentangle the effects of the explanatory variables on the long-run rate of growth from the short-run effects.

Suggested Citation

  • Zeira, Joseph & di Vaio, Gianfranco & Battisti, Michele, 2013. "Global Divergence in Growth Regressions," CEPR Discussion Papers 9687, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:9687
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    References listed on IDEAS

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    Cited by:

    1. Henderson, Daniel J. & Qian, Junhui & Wang, Le, 2015. "The inequality–growth plateau," Economics Letters, Elsevier, vol. 128(C), pages 17-20.
    2. Michele Battisti & Massimo Del Gatto & Christopher F. Parmeter, 2018. "Labor productivity growth: disentangling technology and capital accumulation," Journal of Economic Growth, Springer, vol. 23(1), pages 111-143, March.
    3. Davide Fiaschi & Andrea Mario Lavezzi & Angela Parenti, 2020. "Deep and Proximate Determinants of the World Income Distribution," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 66(3), pages 677-710, September.
    4. Naude, Wim & Nagler, Paula, 2015. "Industrialisation, Innovation, Inclusion," MERIT Working Papers 2015-043, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. José A. Tenreiro Machado & Maria Eugénia Mata & António M. Lopes, 2020. "Fractional Dynamics and Pseudo-Phase Space of Country Economic Processes," Mathematics, MDPI, vol. 8(1), pages 1-17, January.
    6. Zeira, Joseph & Zoabi, Hosny, 2015. "Economic growth and sector dynamics," European Economic Review, Elsevier, vol. 79(C), pages 1-15.
    7. Lawrence J. Gomes, 2015. "Worldwide Growth Convergence in the New Millennium: An Empirical Investigation," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 3(3), pages 17-24.

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    More about this item

    Keywords

    Convergence; Divergence; Economic growth; Global frontier; Growth regressions;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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