Conditional Convergence; Long-Run Economic Growth 条件趋同；长期经济增长.pdfVIP

January 12, 2005 Chapter 5 Conditional Convergence; Long-Run Economic Growth In the previous two chapters, we developed and extended the Solow model of economic growth. For short-run analysis, the most important results were about convergence. We show in the first part of this chapter how these results can be used to understand many patterns of economic growth in the world. We observed at the end of the last chapter that the major deficiency of the Solow model was its failure to explain long-run economic growth. In the second part of this chapter, we extend the model to allow for long-run growth. I. Conditional Convergence in Practice We found in the Solow model that the steady-state capital per worker, k*, was an important determinant of economic growth. We summarized this conclusion in an equation: (4.13) ∆k/k = φ[k(0), k*]. (-) (+) Thus, for a given starting capital per worker, k(0), an increase in k* raised the growth rate, ∆k/k. In our previous discussion, we focused on three variables that influenced k*—the saving rate, s, the technology level, A , and the population growth rate, n. Recent research has extended the Solow model to allow for additional variables that affect the steady-state capital and real GDP per worker, k* and y* . We can understand these effects, without working through the details, by taking a broader view of the technology level, A . The important thing about a higher A is that it raises productivity, that is, it allows real GDP to rise for given inputs of capital and labor. Many variables that are not strictly technological also influence an economy’s productivity. These other influences affect economic growth in ways analogous to changes in