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A hump-shaped transitional growth path as a general pattern of long-run development

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Long-run development is considered as the income transition between the traditional and the modern steady state, where the speed of the transition is low near the two steady states but high and volatile in between. Such a transition implies a hump-shaped relation between the level of per capita income and its growth rate. A hump-shaped growth-income path can be simulated with a two-sector growth model, where the traditional sector is gradually replaced by the modern sector. Kernel regressions reveal a noisy but robust hump-shaped relation between the growth rate and the level of per capita income in stacked cross-country panel data.

TidsskriftEconomic Systems
Antal sider14
StatusUdgivet - 2020

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