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- Title
TECHNOLOGICAL CATCH UP AND DIVERGING INCOMES: PATTERNS OF ECONOMIC GROWTH 1960-88.
- Authors
Dowrick, Steve
- Abstract
The pattern of worldwide economic growth over the last three decades displays diverging growth paths. Most economies shared the experience of high growth rates in the 1950s and 1960s, reverting in the 1970s and 1980s to rates which are more normal by historical standards. At the same time, however, income disparities across the national economies of the world have been widening. The richer economies have, in per capita terms, been growing faster than the middle-income economies, which in turn have outpaced the poorest economies. Moreover, within each of these broadly defined groups, income levels have been diverging. The divergence of growth paths of GDP per capita is perhaps surprising. The post-war period has witnessed an explosion in world trade, communications and the dissemination of information - all factors which might be supposed to both encourage and enable the technologically backward economies to learn from and adopt the production techniques of the more advanced. At the same time, the integration of capital markets, the emerging dominance of transnational corporations and the development of both transport and communications technology might be expected to lead to growth-enhancing investment in the poorer, low-wage economies. There is some weak statistical evidence that aggregate rates of return on capital investment across poorer countries may be higher than in richer countries, in which case their low investment rates might be attributable to capital barriers and an inability to generate substantial domestic savings out of near-subsistence incomes. Moreover, it seems likely that complementarities between private capital investment on the one hand and human capital and public infrastructure on the other, lower the private returns to investment in the poorer economies.
- Subjects
ECONOMIC development; NATIONAL income; TECHNOLOGICAL innovations
- Publication
Economic Journal, 1992, Vol 102, Issue 412, p600
- ISSN
0013-0133
- Publication type
Article
- DOI
10.2307/2234297