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A Complete One-Sector Neoclassical Growth Model

  • Sibabrata Das
  • Alex Mourmouras
  • Peter Rangazas
Chapter
Part of the Springer Texts in Business and Economics book series (STBE)

Abstract

In this chapter we put all the elements discussed in previous chapters together. The model includes private capital from Chap.  2, government capital and taxation from Chap.  3, and fertility and schooling from Chap.  4. The features are combined to study large income differences across rich and poor countries, what is known as development economics. At the dawn of the Industrial Revolution, the differences in per capita income across countries were relatively modest. Per capita income in the richest countries was only 2–4 times greater than per capita income in the poorest countries. Over the course of the last two centuries, per capita income of the rich countries has diverged from that of the poor countries. By the end of the twentieth century, rich countries were 20–40 times richer than poor countries. What could explain stylized growth fact G4, dramatically large gaps in living standards?

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Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  • Sibabrata Das
    • 1
  • Alex Mourmouras
    • 2
  • Peter Rangazas
    • 3
  1. 1.Strategy, Policy & Review DepartmentInternational Monetary FundWashington, DCUSA
  2. 2.International Monetary FundWashington, DCUSA
  3. 3.Department of EconomicsIndiana University-Purdue UniversityIndianapolisUSA

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