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ECONOMIC GROWTH Robert J. Barro Xavier Sals-i-Marin The MIT Press Cambridge, Masachasets London, England re ain: abs Pi of Nev ei yay Meith 18 ‘attend puna hank sey a estnewneuntl es ii on ee ABOUT THE AUTHORS Reber J. Bare sober C Wapsone Pest Eomoms at Hansed Uae Sy Betas 8. pyss om Catch a a PhD. feceors fm end hegre hel aay potions Rother, Chicago ad Brown, ease tc tro Ph Wal Se oa lw oe Hover stot dans Reseach Avoca te Nato Barns of Eman Reser in 1994-05, Baro wa tn Norman Reach Fellw tthe anh of Engng ete murda Ame Bre an us oar Xavier SolnMartin ie pra of economics mt Cslumbia Une. He frched hy BS. fom Ushers Autonoma de Bucelra and his PED. om Flinar sive He ra Fac Reearh Feow othe Nato! Burau ot Exommic Reich ant Reh Assos of th Cor for European aicy open Far in Buln) sd Cela fr the mersonl Money Fund 199, grade se Yenc en wi te sighed To My Fist Gandhi ‘At Gabi iat Schucta "aver Salas Marin ‘Growth Models with Exogenous Saving Rates (The Slow-Swan Model) 1 Te Fntmes DynnEsnte Cil Seck 128 Tam omnes a ae Gumi r eS Coven LL Ende Gow PaseicnlByacs 13 Cet BtenotSbenon rete cto CONTENTS Prefoce - Inston : Ey Eppa nenurer sown Osa 5 15 Shure Gx ey : sh ox Appendix Profs of Various Propositions beget Camere ost Sl Popeye CES Poston Fins Problems Growth Models with Consumer Optimization (The Ramsey Mosel) Enum Appendix 2A Log-Linearizatio ofthe Ramsey Model ‘Appendin 2B Behavior ofthe Saving Rate Appendix 2C_ Proof That y, Desines Monotonicaly If the Economy Stars fram K() = & Problems ‘The Open Econom, Finite Horizons, and Adjustment Costs S14 Thee aise . 23 ann Peer Poe SS Cherumta eee tc ae . sg Sein oa kor wih Fol ea Appendix.” Overlapping: Generations Models ‘estat sae PC tn Eis Problems ‘One, Sector Models of Endogenous Growth ih ere gp etme cant 2 Snes ocooace Tt ete 235 Ros Nonpoay aei npaine 445) Tran Dymames man Ensen Gowth Masel Te Nett Dap Ee te eaten ‘Append. Conditions fr Endogeneus Growth inthe (One-Sector Model Problems ‘Two-Stotr Models of Endozenous Growth (QVith Special Attention tothe Role of Human Capital) pen 3 sn! panic wit ew Eatin Gn ean Ses a pens Sane Uve-acs ake Aen SE th win dened Be Deaiems Tapat ae eee 17 Teel Cg: Mls wih npvenenin te Sarce 7 ut ert Gay ate Prien Tclgy BB ‘Ts Batu oe Acoma es 2 EERE el Poseas asa The Dison of Tetley = oir ctemcm et eae Bi 1 Sean bon 5 9 Lap Sup an Poa 5 Appendix 94 The Form of the Utility Function with “ Grrapon ad ek ar = Problems : 8 | 10 Baten Bemonie Gv Guth Accounting = | I enn “ Empirical Analysis of Regional Data See = | id Speers A Siar peomencre = 131 Stent Tey a onece 1 Mtge apn xn 12. Enpiial Analysis of «Cross Seton of Couns is Ep at ey an eh ‘Append n Maha tos Tena geo 12 Rte Ory rma Equa, Reece 122, Cha Nlnear Pegraning: uty Conse 135 nme Ceara fe kabe-akr Cane 13 Brent 132 Theta poem 138 Exon The Nests Gow Mas ete sana neg i Index ay PREFACE Kaloamsowanbiegese dues ommnenee Exons hin some nese nays oe that poh stat. Yet ove he ine te aly cnet aga sre ate 18D Shen aheratote font dean earch ame ieee Its The pening eth anesena ft rev a gnats Iereentivesignnnssrdiopoe eminhecmeste carer nek. Thseied rooah ing the nue heave resech an ano el ‘asin which Kroes acing, Westnet i some cases i he tes ed Iota cases opin at roa directo Tae we “erected 9k besa th mss he stems ig ron gohan sen hat ao sll ensgen roth hey eho em Shek exendel helen pesca pouth sel special fa futher the empural mats fhe hry. Tha tok combines ew ewes festion ote main rare tal spare em 10a ces he 19 The Uicusoa eset npc impos ft terest reason bere ype toda snd eve. Tacs of hesy an empl ws ‘het tig apt ofthe agen erence wak en enor oath “hs nso mts he sia inl oe ey erp ela ies mite gro paces ova re ny oder grote {Cpe 8 deli te nels! growth mde om Sloe San she {98h o Case Ropar an ef Rasy) mee To een temo Chaps tan ever ses of endpeon owt hy fy on fr cantante true fe Chars 6 ee ‘ce oe of chnlgal hnge RAD. ing expose {day of pode and diane kale Chapter awe eon ‘xdogerus tein of rsp ard pp. cies of fot ay snd brea che. Chae 0 dts the nae and wa ‘Biot apa and Chere isn 13 dacs sme pa digs. "eels rien tate whe lee eeu pute ues in coms iis exp stb fx coun im maces. nee [Bom andecnor lopment Te saben deve nd ede ane Eizenayear tse sure meson gow ante ie put tee tel iter cre rata canes amacrine press ne Uteysstfly wd te meni or saes a Mec mis row fu depen. ‘Sol he chapels at pide theses ot eine cess brogh apps eens he meets The Ro aematis ‘Shes rents eusions nd rami pati. phate diesen ‘Seimei! pend cote the ok For unease wb aco ‘Reale win lof hai Rok wl werk wel or ast “iene ps of theses ad empire mscaches ont nes at his Sern fhe tk lee rmai po ae or ny Seas eter ano Toes pede mann cuneey wih devlgmant nthe el. Sperone Tomreaer inca nies fro part obama ‘sad ene ntl te rputiont heen em cons Grete oon ud ype tory Pipe Ashen Mews Anesen, ‘Gay Becher Ose lta sn Bau. Panl Cat, Dnt Ce. Mice enoly, Ola Gs 2 Grice, Gene Gres Elan Helo, Dale oe feos, Reni Koel Remar, Pl Lane Norm os), Gee anus Caey Malian. Raia Murph, le Pres Toren ao fora Ranma Suge Rec, Pl Romen Sch Sul te St. ches Sina 8 ‘hn Ste, Mas) Sieh Roe Tomar, Meat Tey, As Tel. = ‘Gamat Aye Yon ober Baro aver Slot Merce ECONOMIC GROWTH INTRODUCTION 11 THE IMPORTANCE OF GROWTH. {Bera i om 250 in 870 SIRS 190 a essed TS da ‘Teiscrene acl gr capa GDP ceeds gah mo 15 pee ps ese Ths porate pve he Ded Ste he Nig eve fel er ca [Sop De ore 1995 (wine sableeceen Te Uted Arab Ems tallpoce ih eal pepo ietbentmpoened overlong eral neces wheretheU ied fe ene pyr year ssl pow te of 075 peter fer sur nls teat exec int afm 100 887 by nats pron yr sea, Pu (48 pent tear and the Mapa (8 percent por ser We Uied Sues ad begun a7 aa el ec {Gop 1724 fh then gow a eof 075 pene pyar ove the ea Tab sear ben teal pr caps DP is 190 wai ane ben S859 p23 ines ae e450 ect eae vein 1801518258 Then, Ineo aking Stn the noo the Une States weud hve aed Shoo 2 nus with dts Top tater. fe roche invert jt cep oi prsear tebe US. el perp GDP 91350 (rua ane Ses cluee at tena gay ond Wald hve bce soe ‘Soo es an at in orga al Gres Sere Bree ae 2 mone nn Supone ete te LS scl ecg ODP a pve ie 1870 112.75 pet per pe pena prea get un ele $ostighersoumane sce hn experence he ny runs hs 298 ‘scent pear om 890401990) an-twan 78 pce er 90 (ioe ith United Stes tad i ep 10sec GDP Sha4tand hat hn sonar 28 pre perro 203 ‘enteral peeps DP weave hen 3 8317 en he ‘a Ts7Dand Smee tl este a 190 of SIB2SH veal capa GDP Sts wel ane area experme fy cat) a m0 ‘Seine Weconsay eostr iha eomnatone behest ‘eof 5 prem por er mp ie Used Sie wl af Ailes of nthe 20 capa’ Siesta 80 Corpo vce rel ecapts GOP sco oueiee {apn in tine ev ter eer pe Figure gan or ing fre erent GDP or 8 nun 188. Te evar (Sota GOH da0 Tx ser ea ha aun eon hon hd ‘ean ena nge ann he gon 23 me he me Te scnomcnos 3 i ee chosa compl histogram fo 190129 coties Te mean tase gna relprsopts GDP St S275, LO ces teen DENT nal deen np fel er spite GDP in 1330 1, png oprone dpeon rele capa GDP ines I 1861980. The iar, In othe ated Sees, enw tes lamest S85 ‘eres TY Hpi were gro te ong US. te. pect pe then ae 299 orch ne 0 eve of U'S el petapan OOP The ‘ied trl wou stl [2s Eop ere pow a he ng Spams rate of 27 perce ere or It coal he aeage owt at of pe apa GDP between 13S 1990 ws 8 pen pt year -eay thesae sh ang em US. teh a stand dio 13. Fe U3 a hogra of hse go fu the ene rm "2 |p pe Sear org to pre prea South Kee. Thea difenestm growth ats his maga heer tro comeyuene for snl fing. Sl Koes ned al pr capa {GDP by actor o 74 om SH in 1950 a 8a HS cet SE $5190 ak 38129), we a were lpr capa GDP hy aco rom $3019 ak 3 01) 917 DH! 1 fewer cores aot te fom 1960 101930 ht ere ey sbigh as Sth Kreiner at snes pee pe Sear ee Sagar Sine pes Hog Kong tin 63 poe, Taean wth! pee Baers Siehs7 gone itn Spent anyon wth pre Thecus ‘Scud ther levee ae pecans GDP hy amu fate Sonera eens 3 years. ‘Alec ne 1 cots in aon rgd en rom es of ‘sapecana GDP rom 1 190-The ot string ihe nesta Nadnrstr Mortove, Sra, Zama, Uganda Guan. ae, Naren enn Cena Aenea, rena, any, Nenerss Mert nd ‘igr Ths se Schaan An counts omit he gout po fre ‘anh Susan Alcan counties hit fee othe ry 8010198 stony pret pr year Tht th ype ery Su saan An Inco pr copa GDP ya fac onl 3 oer 0 yan “Ee wan andontund ny cont ier dries nde of Using gael ey ten we hve nue comes egrose ‘Sch tir serge in germ groth rats (igure 13. Even sll i ‘ences ese south en ven soma ver senersicn o ure, Be ch sen enaninses fr sands af Hing than the Kins soe sins ace tut fave teal exuied meso the ae of oc ‘Conus Top amr way iw sane aot erent a opons uh mre ones as cf ing as Rao ond ye ry of mccoy of comtceical icy td Being eure posththe suber of Ms boos Ue art of macrecoert realy ates 12 EMPIRICAL REGULARITIES ABOUT ECONOMIC GROWTH (esses got ° 1 Persp up pos verti, and sown ae es endo ih, 2 Phys aptl per nner gs cher tie 3 Tete of em Wapiti ealy estr 4 Theo of psa caplet oer cams Theses iter a pyle aoa come ey sna. 1 The growth for er weer fers sbsantialy casos? a 6 aon wh cosy dt a eve andy dace, Fg 13 4nd 8 eet reson el th ee a oer ‘load counted eshte ern pis sl Gn Scan ye Ue Rg te Ce Sine sce Mion (1982, Choe For fcr shares the Unica Stes te so (19%. Apen ad SG. and ramen (87 Te 3 er at everest sen ou Est Asn cones Hog Kong Spe, Sead ‘ire and Taian te ey re 1 gh 9 Stes seen Seve ours Canaa, ne Gera flan. te Netra ‘Be Unsed Kingdom atta cr trea sao he he Ged Sis (Cariemen, Carmings ae geno (08d Deer (191. Src si American cone oer by Ele (190), the capil hats ed, Ercmernmeatrane etree ace pa alr’ chimed fone sub felts of tar pp be eau intaece by he expree oh Une King et cae he el [mere tesens ohne longed ae aro 957 Fue fan). ee ete ay 8 Tae Re tn ie Used Sas ute etl vein oun 98) Ts ees ey hat Kilo hype a sly sts elt fem Sould Be eed 3 teeny fren fal overs age ancy Sees ‘NE can be es n Chap 10 sess he nash eens of te pouthae ofl erat GDF Tales 102 0 conta ues or Agus asin oS seams ver peo ugh century Ths aera {lly esha he selena bu gt okey og tine tera ‘Te 103 sets 1camenly devel emn te major conn op path ted San Cra ad Asal, Tee dats cow an ere fercap goth rtf 19 perce per par ones ugy ace wih Wel smb 2B seu pends a aw ‘Pesenumerstssesinen wh Kad spoon oh {pt GDP han clare ode ne he pre aane Wd {Wa siow govhracs wel sowetielog-rancape The econ ne grow pind te oe used pracy soo, paren foe weve the ponte 1970-90 highly “ile 103 cringe fr cme seeped conten As sc Litin er In ese he asrge ga phe 1080 987 Aine os Ne Wr rior. 1950-7 sown grenhrsellbve help term aver “le cri imatn el capa GDP ove 100 cates ftom bob 185 evans atta xc eto eae fs at ida ty Kale One patente seo a tt te owe [En per sai GDP st eo 199) esc anerae thhe l ‘Sulforcan GD in se Chapter) teem ecpdiaChape {Somer oaenleney fh pono fs ane che Beomergne. "Thoth spl aap face out nde ating ion fr ad rent feu ds evel 8 conergence, This kn convergence ‘he spear nen en more tomegenesospeup ef cou ach ie US scm fen! European cumin sn pects of gun {So Bran Sire Marin (91-982 and 1920) nd Chapter) Te ese "Shes cer plans pce an eich ane Ths Bean so {Use Sal Denes "Wess Caper | tion! 8 comegese pes if be gow of ea yr cps GDP hse eed the sting eve! lee ata ‘Grate vedere cha nals Puma pal, ‘tenors gremnen piste popente:fo seal ae Se a {Sn The ha resume snp tat he at tc sow vergence nan ate senemcraly ee 8 com fee incl ‘irae ao DL Bao a Sree SH ond Man Row SW [903 Te tea comerene fs homever ny shut 9 pet per Sa Ta kts ot ya foram cmy chia ne Fe ap ‘ese a el prcapn GOP se mpm ener evel rel pe [ip GDP Cas urge ein prow oe tine “fe reannChapr wa be varie iin nese rhea ealper po ODP-oce te trghveoel fraps {Gop said cotnt Fosse south dopedspstt one alga ‘Sfouman cpl nb tet atonl aomer seth negate ete ‘operon cnn yenng fe CO® a cael om mete ck ‘Gog oman anplisalsttky. The ra of zs tnet 0 GDP Seton pone core ih the rw ate tae ming eee sae nat cho i ascent revere nga go paps Shite tac of eset esr canbe see slong am ‘Slogan nth wigs ve Sor Cee pan 1993) “Eonsmte hrieumento suvand development R&D ey cold Semin ona peo 2 OECD cai ao a RED spending od gov har over mt yt ben cui. Te rome evidence Wingy ot x ue of way wich he gs trnnees ances sow re, Negate acces Fue the 0 tine tins gen ante tcl aoa dra of ‘ners ean poll nity. Posie infuse eran ‘ice nstos th ssa he ae la pss ples pote te Seschpeof tains. td peta sendy soe rs se Insects cass hemp won des at poe oust exes fire ets especie gover pl) an roth, bt as Som a te ‘rl aka of les manera Tha, by aeeg non owen mes the gverces non eon have maar esnguenes Sani ing ta \tefiahesearee As ncn, hela Secon govern pli a ‘enh spony saree rah “Tec seca da ses reveal plries in the eis oh a of _cinvestenn GDP Thr pel ele 9 tal oman al | ‘Beton ofeaemal state and health and iene peyote sh lee alerts CD nee caren eer ts DP fangs shut sks ane ese stn cop es ‘econ came shutters athe nesters om elon tinestnc ta Naas 193} yon lang em noma fe eau. escent Fem osenten 1 CDP (Se Fas 1051018 fd he ure dosed i Caper 1) Avra of vee ad ing fos over yar masts coms thal hve nog afr on Feed nasi ows fl Gre Nana Saving menses $ Fara nid county. ele ince tha eine a of ec invent aoa svg esl ile Does ene at Bw ‘Scruton higher han nse sing at, browng ar sad as ig fr asian Canta 0 8 192, aan 10 9, or The ted Kings 19019 199 or Koes 1980 169 fat Ig ah eary D8) Nan ning wae moh ger hn dees ve In lenng shasta fr che United Kin 7 401909 rte Unie Sie, the ihe obser fom he ale he sabiliy vedi otter onesies a patna saving The ny eve. ‘steely tow as 9501199 prod ofthe Gen Deveson $a Wel War I. Toe Unt Sis however a eather nh eget th Miso neuen an svn titer he revenue tom cer ines nese ato eine faa hea fer 9501989 ae inate stsoly sear har se rom fore end Wa ‘helongem dn tive neste ha he tes CDP af goede invent ani pos nel tigen os conn dep a eat ‘ve sean: Tis pate engine ees nse th entra tendancy dese r hebmtr stont ces 8 101980 The asamp acon pro nny, hh appease Pe SineSwap de eee nse thioguanine Oe The cso tao evel ue eats mh pet ety rsa ents of peton pnt Fest eames thee at tes odin wh res nea er apts GDP. Fre cet cues ever the foriyr my te wih eal apa GDP Malar 178) Exc othe mon aan cps ee eng eave ih the ery reheat nae etn pty ele th he et ‘het eft these feces he ety rata he of ppl ruben al oversee san con elepe The sung ‘oper crt se of ppt omtbnnter ky cement he Son ‘Setomael “cotter pate 13 A.BRIEF HISTORY OF MODERN Gaowrt THEORY Csi ecnasis, ach a Adan Sith (1776, David Rade (8I7 and ‘amas sas (198), an masher rank Raney (990, Ayn Yams (0900, Fa igh (184) an op Scunpere 980, pve any fe sng ha pea nme eos femme wth, Tes es Include theta appa omgetine eho aol equine ol mining tres sd aon she accion es and ‘an cpt he iay etcetera op Suen he efecto! epeain tee nts eal abot a scovees of mw gs ad made pedi athe ‘monopoly pera an cenve ar wchosagal ave. ‘Ou ain sy bes with uta ks eens in ae and oss onthe cots ne nln ra sage ate st We ee ‘rcs tga ngage ade oo cep ch aarp cp {Eck agente pristine ty fecon represen cumen (ko fen fate te arson. We bo te meer her ‘neh rane opimston a ern peti Ts ls he Seen iarndn sc ecnic bck eames yer "Fama chron ipo the ating poi fr rm growth iy ‘oteclus ci of ey (028) er twa ee cabs hed fo ine Ray's tet of Rs opin vie us Beyond Bs {pplicton poh ays edness consump i. so Inga even sieseyle ry wut ining ep ns as Rahs (ad er 980) needed seni Resey repay Senuable aly fantom 5 wey Se a se Cotb- Doo poccen ‘het. The economies peesion dc howee sepa aie se ey tempted mere Reyna sls wat mes of ecm oh Thy ‘dtd ecstasy the pe tp ek ‘he caps ste smereny usable Sie ey rte rng er iy "sth Great eyesion hse poner wete eee spel onan Alt ts costs gre age esearch Ne Soe ven tiremiypiyesin acy 8 ‘Sean 190) The hey sips the Sow Swan mel the necro ‘prod functoneopcie non Dat sie oman us al di ‘Shing wec ing and sone posi soa easy of saan ‘eneentcip Tisai fn s comme wihecoan sing “Gee ptf rae te whch hw bn epi sul at pial ips ey ince sear, connate. The ver ‘Sing evel eprops ODP relate ngs ea ee ion tetas gw rae Ti prope cries robes ef mag Se epee eee caemeomarae penser ienlo aver armanihe goths The ‘Soneyensconsa eae he steady sae ves egal el eta er ener depend, SlSu del nthe singe outset pop 1Son. ante pation te pedctonenp-taset i ay ‘ou comonass Ree empiea tas neta esha ian Sous eros caney arene Sens npc lies sod nina esc tm capita The ey pu. bowse that cnet fo ‘htonalsomergece aba ope of be Sle Suan lances spay pone recom roth os cos en. ‘Ace eon he Su Suan moe thse ses fom Sing ovens ecology, per capi growth meena case THs etn which embetter so as he ‘pon of innsing ens cap We have deny ober revert Doers Soha rain aco rece ae “he alsa enh hors of te ae 1950 ad 1940 even sda een: sleep Dy suming tat og ‘pojessoccaredinanceogsss mane Tis dence caer ay ih oun, psy cst per cata growth ae inthe ng a whe eng ‘ne pretconeendnnal coeteence. Peso sbramng Roweer ‘te lang per sap mut te termine enteyby anemone ‘feconopeal preset ots oe me [Te lngrun grok ae Static exogennain th ad hay Thane od pth rel rch SSaeagm certng bongo gowns bvnsyssnasSaaon Ch 8 nd Kops (188) ug Rays ara of cna pinion tock ms ners row ne and ey vie oak genous draenei ate Tis exo on er ta ‘nl jams tena reserve he pens codon convergence “he endpeniy of ving as de cit dees of npn capi ae on expen olga res “recqulinurotoe CarKoopnos tena seca growthmes! abe opal ya een. compte aewor hich pode {sho erandcapilserairmaninl pence Talos "Real pat can fe nin ae sche metres co ‘Shetentoscale Maree dovarsuet ocerste Piet otal “Toeinctnofatory tween chngeimeetlsi reewek ‘sot bce te snr sopetie asp ox be al “Tecnapal vance lesson fae ewe ich ae ply me “Sina lan pee gs eran non) rs ‘ind vlc produc sch a ald adn te {heat eicofkledgeonbon pede coe woul hak hats poses SEpcata om wih sane smn arc nd nd an oan wie ‘Zrinduled we te fede, Ths tceing rr eis oth peat ‘Srmpaton apace hesmpenston ould ses arn ‘her can ria cost sf pdms poi Be opp eal forthe euch ee runes thse ee, "Aro 158) a Shes (587) cna moda which eas ere samen! bps of prune oe vere mean Sie img by dnt thn mols ah pons iors tein spall ret ei nom) an snes itso cess a might be Cas ‘aly feasible fen edge era Rare 198) shed erat ‘Simp nunevrk can eed bis cneto etemlo un cq re ‘esau, esi out oe weld peal nt ao “pm More srr te compe famevonk beaks dn if sere: sper in parton purine RAD tt ad an indians pend sty guy ober rcs nth lb ening ade ne \Cchsopal pres suis fae sane nthe usec sh mel 0 |scoqurae miele competion” There adn sy i et ‘tas goth mel Ther glow hear Bee eee ecb ind Soi Tow wet th empscal sppestone roast. eel ‘Sona wy ae equte to giealeo k rum ead sn ped Feonmctve antes oe mods ware excuse Pely fT lof enon deep an scm grout ed pur andi rag aes eae sls cope seat ‘titan ck tempi ac, rw ey fecey ied av an ative eh el ye ely 190s, ote eof Be oma ‘pests vlan se thea shock. For 1S yen manseconomic esr used shee cans Maruman Foto fsa expectations no tate th roe spenches {iy celina alse aplniono erro eto toa Saget aeons teom, begining ithe wa f Remar (1086) and Ls (988 The ra. fr i resech wa earn recline eras of {Empresa rl as ar more npr ne necks ‘aie leno numer ts of ety ads pee at region he gicanc ffngun growth sen sep ofr Scbntn expe statpctete he nected nice oe SSmveapiapoee acy erecta es ‘Be within he mal be: he esa ender mee “The nl wae of ene rescore (986 Lacs 188), Rebel i991) ben wero ron 0), Shea 967. 985) "etre nna fehl chang Ines el owt hy cunnebl terasebeeureinermernabatc pa goa Shih ices hs coo neces ath aco deck, {Tasieagses mo ig 9 plvert wedges pce nd veal ents en meal arp hs pees, obec ie} ‘pve tener dnitig emote coma “oe itor of RAD ther veer compton he 0th femewer ep ah Ree (187, 195 and nls ste con By Athi an Hawi (950 a Grossman an Help (191. Caes 3 aed 13) nce male tshmlpeal rae tke ft pie RED stv Shs ty ses y sere feo ex amply pve I re See anette tty oman 13 ve ibe logon Te af pov anh dehy ant eve ‘even howeve nt be Pare cial cate ofr eae a he ‘eatin oe new gondsand mets rote hes eens he lg {Som gouth ts copendhen gerne stmt nao mma aT {swindon ponteootitesvce seen peecon neice Suh and ean tran tase Seals nde at een The eran Gee he til or "Themen wach ncnir musth sonable: Whereas tie asp of acetyl tte ate of tenlope gre lng. ge eccoomis ths of sin pra te ame nih le namin shar ion neve sane Sic tiation nde cheaper ‘turns eis mses edits orma endo enverence Bt fess the pein ef te ool prow mode! rowing eo poplin gow owes he as {ic lvlefesha andar ser nea hry ree pera fron fr gical vet of pe capt uP The anor el dee Ewer comatern eft of eras oa age mes pale [Stencil del The esa acoso eae lh hep ‘pny tery ste tend all ah pr capita come sere main ange espe tty se wih pr apa Iso te pore aus. A hal sr ied he casey ar spy ms prow cm aera ‘sions tare ene “he ares incon tcenth row then of 980 nt sos tn 3 that een ars pa lve ateton oe ne at and te ation eter ey a dat Sone ped pepe invavesamplfaton of i ental ipleations of dh eder ea. nay he eliical poh nels prion of oniorl convergence, er says [ipl mre drey theres hf enogeo growth. nding ee les ‘Fietang re RAD acy ban op an ean shoes Thiisbok nc ero resis eps other beeen than tnd aphcaas Ts meee te empinea npn he at thse ate devsp. Weak ile ee chap ht re dead ny 0 ‘dean empl sdses “hs gen ruth reach a arate rete fm coon fn wide ‘ai fn Confeenerengrwttaneacpatn fom pci n a ‘nomic etlpmtnematonal esis tary sn come and {covert oti We athe eesve connin teary sd ep alone ths trod appeal and allow grew ter oso ie Enea ivan i, We do nee! pot hey fe 990s sale he ‘Se facie gonh hey oe 1968, CHAPTER 1 GROWTH MODELS WITH EXOGENOUS SAVING RATES, (THE SOLOW-SWAN MODEL) 11 THE BASIC STRUCTURE. Altheim hc we ics his bk vee se bse pene fxuitviom rate Fis usbols rf ate lps and ases te cong. ling oxnesip Bi lens and ose Tats he Iacono comme and sane. Exc hosts dermis fom Paty she veka aor re an ow’ mah ork Sand, ie Ser timetht ows armpit markets ats ‘tic irs il god hush one rnc anoe le sec ch Imprint Te ues comand spp Sorte eae poses Robison ruse-aho owes the fputsand ao manages the eckrngy hat rae Sermuiepatin oop Tew sl to pu sl pil Ry dab, He) Tae pets ann ae te Yo) = AKI Lena an tonnes wmveaenets sence sae semanis 18 sash span Te pans gn ight ett ero net ULAR ecm ce ot a sng ana ae mnt ‘cit cpg to at a es fine enaem ene auouastenmensaeane te ‘cphetcie ae mpeaycionas pese Eli ontop tces eeteaen ct ‘se ct dir > 0th “icone sik ys cpap ne gms Fe /-0R FLD aa S02 Euan serine eee hts se ume hr # ineeie af Tso le he ae. eso ine catia : ie natin res, ln ant Ue neo te ey SECIS Spat cs ea consider te tes on igi sn malty om elation tn hs ‘epee simpy yasmin hat portation grows a canst cogent SHOLE~ nto acecnenenatata gen meny Ive mrmaize te Stier f ep tune 0 {sole work ten pr pee a hen te ‘pln nd ate feo ine ar ego un = as 1 10s sen rom Ea (13a eigen absent then (4.2) Gouin hte pf ap and ou Te et seco, tt on as boi Spends acl ome pei fhe rocton Fines, Fo nace appre deems in sono sat lea een cal dierent ees of eeomie pow ‘THE NEOCLASSICAL MODE OF SOLOW AND SWAN. 121, The Neodusial Production Function 1 we ele cli pogo he poo fein rm (1) Wes the asin econ ecco He proeris tested int forall > Oa L070 ete phe and esog ‘rile woh eect each pt Second Fo exis conse ose FOKAL) = A- FUG EV A>0 am “Tin he magna ptt of cpa be ppachs int sepia or Ian gs and apeashesd capil (rao) ges ban = pyro use) ire = jincey = 0 “Thess pope a cl nde cnn, flowing a (195- “feo ofc eons ata be rien Ym FUL) = Le FURL) = bf, ‘oem inns asioaater nine sei mmsoeseat ane) 17 ere = Kise ptr, = Lis percaia oa, ante ase Ser fin ced 1 Tis me ae pe kaos ye ne, we Necanuethe con ¥ = Lad terete wih spec oor ed {canter wa peo fred evel te mag atl = Fy ove (fds Tetons yf) = anil 1) = einai cea econ FIO HRT) = He Froeres lop at supe iain eterna ese og Se ‘Se oppeniv ache af otis chapter poe thes popes ce conte te ca ha en teags pea ase an where > inte eveof techn. and acento WhO < 9 1The (Cite Dovgl anon an be wtenis rics yaa, 09 Now ty = Aad > 0/6) = Anda)“ 0 wr Lon dg neuen er etna eae sis pam Cannan pr fren se vc iene ths Beret transys ‘cn 7a Secre once canned te 123 The Steady State edenea ses seuatonia ihe vss gute sv cans as Inte Sulbw-Swanindeleseaiysuteconegtat 2 Sink re stati. toaninenesim of tes fQleanevih ctr 8 eae fe The cementing tle af fs dtd 1" (We ear hereon he as 42 Dandnegistte eat = 0) Algebras sss econ SH) =o 6k an) Since kis ost nha sa an crs a the hes K = frank Oo /ehrepesincly Hee ne accion eae th pe cpl unis Kn edo mt pint say sae Th coms lie era eta es tte feat inher Fao not Inthe aly states ri optim poe Cogs inte eco enon: rosa hs ofthe prodton ‘acon, J he anng ain the of ppaon grote ae ‘sori a al ve ess nt perp lel be ina gee Ses te ey se Fp. 1 fr expt pros pnd ai ae odacinfoncn ranean siete" Jucone spe ae Keane in Annee nn cr mots en te sd simp te tat changes in eve fecha. the saving ae, ‘tera ppulain gota depron ae ow see Seed 124° The Goen Rute of Capital Accumulation nd Dynan nese) Ba atin ci nd eras fad 8, ake ads ie ofeach auf tie sing 1 Dassen he H's aithdt ds > 0.The sedate leciofps cocoa U2 fn, Wek fom By LI) thts JU en Bs Pees oe ‘io wrigancapesson ore CO FFB) 6. am aera etn Sy ecen teh g0 y ee {ihe banana sh pantera ae Feet eri i meee IEPIRSR Pca feng atmnne ewe nv no 29 sconevoart Fiat acominin Teta te trleitanatan Fizsce 12 some he elton ete an timp by 12). ‘The gy img nr te ofan ny ot gh “ifs The ume ais termina hn te rave anes. a when (7) a eb ate = 0 Slne a4 08> ew in bras ce fe dene the value o 8 fa ht onesie he um SEC en erin Sans Ep Fibga) = uu ‘he somespdig sng te i be eel ty and he ase evel of Stent ta pera coupons Ben ey = fl = BB "he one 0.1 cae the pd rae of apt acumaaion (sce re lop Te sue fh rae the el plc ef ond, ‘sich ae" ee you meld ate tet ow en" some ‘Shon ple owitan be mere ss" ne pve these amo ‘conga renters of exch cnet snot eraioe ut i we oo ‘hepsi fue pertains an careless the maine oa Strep omumptin ‘igre 1 sts sings ofthe gllen rate The Fe comics ace pe anges sg dsr hy a Conston et fr ine se sg evra ance eae he psc he Uh ib tebe appopte v=) sive Foe cach. he sein vate (ftom te iestonetean te #4) ce ah De n= 3) line The yap capi somampn. 6 rained when X= dag ‘Scene apn oe pdm fantom asp puss then 8) tom mmces wrod saoi nies insu Hes 2 Senge a ie coer yep Me Trang Ethem + Btn er atone hes: f(A carve on hence, sO Men arnaeatapnc ante soa Wars Pils =U Fenn, a5) oo ups ln eso, The sth as Systaaetgerarense ct a2 fin BY Shh 6) sep strc Hoe sete wh ay Ty Sinee0« Sv) < eaten at an seis epi yy = en a eintemonibe sabe dem oop soa heres h8 = 0.This un sas esd eres) te pion ich 9s = 8 Meese eye c ce > Ph then ino) b4 8 agons es ere he dan eco, Howe Ie exon lo ecuy ae ew geo lb racy 0k 0 wl ey gerne > ‘eS: Swan see ubih somes costa sin ete vet comuntcsper paren sgnesibye = (rea) Hee 7, sees atl Saarinen Consompisn, rhe, Sow © 11 sua oy/ot = 1.26 Paley Experinents Soy atu siya vy pt ih cal seer aac the pveranet ton oso pe a abe {Simla wc Powe hm ae (udbschas step Heme be cation wien +8 ine ‘Rte igh! eset sk ners Meehan at tom db PAL t= hye popbewen he ofc nes pe ar svig sme eens ern nan nt Ast nrc oh re ald appente0 {SFaqaan eo srr oman ese sig ‘he encore ea potnrerog ees {SPEEATy ae ene es Sr tpn pons ou 0. “unseen inl cng ssc py ete ih p pa pater poate ei, spend ina propor mamer ten he s/c ure spd, jot Fig 1 ery aga ecm pti tempera eng ie pormaret pcr necnlogy gees ihr vee ad ret cues ne spiscape nee is ne ee es at Income ae pst pope ean aro gerne eli re ula oa pref ecco (Tes oises aya ene the ‘Shing nes Thos bnge nes Ke fps a ee tp, Bae ermanen ees on go sn Sokm-Sean ml 127 An Example: Cobb-Douglas Technology ‘We canister cae of Cobb-Datgn predation faction [nT sendy te capa ate ie dtermioed fon Cll a8 lean = ay, any Not tat 3 me groper amore ener prt faton, 8), ‘ashing i ot ecilgs Ad al shi ate of populson mh she epson te 8 he sed tae cup! ca ee Thus." iss ponte Fnctn of sand Aad egntve fncton om and 8. Along erase be rom ae fe mn 1.10 by 1 0) < en by Eg. (1.17), sh 9 9 (1.18) poste Ths posh fae eines ue ond approche Oat specks So 9, = ye Ete than af ts a fT parla thf he 128 Absolute and Conditional Convergence tion (1.1) eli he erie, ih ep agi rye = as fv = ‘bes hing lalla a acts wih ae sles fy. A iponan gosto arses. sth es an a ernie wh er Spal per emon tenn pom fasernpercopiatrn! In shred deaths ecomegene actos esosams® ‘hoor he preteen. and andes hive sane pscon fncn, J Thusiescommieshanehesme tnd ovale as aie tons Aifewnseammgthesconsme eet eaty ofan 0, Tee tay eck oped fanctns The tel hen pst evan ‘Soniye as of KO) sd} er owt aes The Howth) was pen ehgher inher ako sna pe! amingies tun commis one wih tal, 1p angie ter tng inka ss Hy Since eck ecm asthe “nderhiggrcers the namie of eed chy the peje n= 8 carer Hence te pow ay amarante forte esa wih he oe alt lpn Ts piesa om | Soveroce rons counies vier arin aes theca awetiper percaprs pout rts yon ten cy mesh oporcomerzets ‘hoe with per capa as ‘The pe that pou sccm ed row fe er cit an sch {eat comersence: This pens ees only mated esis en co one ica on gp coun Ween eagle sh owe apiece ad ce secon of eum nr the eid Bos 8 {ple thavrge enough ral per capa GDP agi he og ‘tel pecapin GOP athe sao hep, 1860 fe Scunes Te owt to oem cous SGA mse eat ent) 27 a sneha tomas ‘Spee ae ‘ac ne ely ucla with he losin a fate een forth ily er cues opr ser free Pog sep omc ype sinc come somos Pgue1shors te rein wc mi coniaraion ene aoe one ois hat ere meme of he OECD (Open fr Exo, ern 2d Deveopen ate tego ese prod. 9. iy pet cumin ener Senta be pe op é ‘Hisar GEE aa ‘Thistpe of remthesnnese dentine sgl fe comer ven ‘more homopesna raphe serial US. mea ese se Sonomy Fp | pre out operant pesonal mere ate {fom 880 198) apn hog opr cap penal nee V2 Ae ley gre "Neca cms easy te ec bran on convergence tw allow fr tpegeny see tant pices dop he a ton tal oars have ie ane pre al he he ae Site pins the sey sts ile hen we hve tomy nso oder a ee feo! conten. Te main as tht ene ips asthe omer stam cea state ae Se See goer per ere amp at a ye imine diteeomepen mca ae ‘fe peace poe ur perc tre peony ate Bee We ite he ice fel omen in Fgh 1.9 by consi sting some om ony esp: hes De een il Sot cpl perpen r= MO and ec they haved sam tn ye Ro in 1, tees arse tm Ueimerectontincn, Meytcureswshtecoumon +e Wess he {Sse in nih py un a ec. He fy Bese ese eens He olin js = ny apes ele sate empl ‘ecw in oduct hat otis hp vel of ler ap ‘ODPrenlo lave ghesaing re) ‘Thequsstonn Diese node pret ate poor econby wl go oer ‘henteichone fey hve sesame sonra ent pra ech ie ‘euhancebewcen he /tVLeune ithe w= ine--wcalde peor [persons ad yey > Yaqoul apply Hoever she ih econ an Sipe sng tear Fi 18hen pr ya on ol Here. the mal es eer ire allem ay we "The neces mel spe hat ah economy ener ov stent tn that te send of coerce les very te ian ‘om tiny ster word tel ee cmd conerens sce ere inthe ses iat loner ang aloe er cpt none end poner 2 becperaniasrowraecxe we cote Jerri tea sae ‘cathe wey sate, ks epee or eng ee fhe roan facto non vr ovement pls at efletey ‘Sl post hp etn The sigr on onerl comegece Sige we olds cinsan hve dears fire tee ‘peed iene relcyetuen rth er ol ial poate ipeaaiy we can Mase ecco conn eager wing oh era ey One of he deermen he ‘hinges We an ne We ease non an (ene pose Ire elas ys xpesson oh ten canbe epee [fo 1 Lee yuo (119) cose wih ye = O when & = 4 Fer iene tortie ttn mk nbc ae te aerage pot cal Iau inanesy, Buatoner tna ap ih higher ot he een ‘Metso the aye ve En pe, Ue mst ep ele si ne fT pity tl me gd ‘Fiseutin yh. spear we sod ok empl ae lon ‘ecusen prea thr, he sng posto. (0s alg hed ara ta stan ferent stay ate prt, ora ‘ely mimegencun pop of ecemmie och oe US. aes, he iene {neal puns iy bran ane would sl dae te coerce Suter show n Figur fora iad seston 11 coun, beer: [SShown in awe te Sirens in eas pstons wold be sab {a Movotr cousin ww ring lees WO te eso be a itn pel beans ey ven setae value. pra besmse of ‘Broly le ning srg bd orernment ple at eee incor scl tte poss tn ne rd pcan potae ‘yb it coneavn th gl) sn Fg LS eae lO ‘eH uncle wh he ap om he eat ste, OV] The prspcte ‘onal ceoveaence macht spb ae ee ‘Retina nChop 1? atc leon of arbi hata for ecaces luseay stn psionnakesaraj irene rete ead es soos f notes Wher hw adc! rae eld on ee ‘Seen te prepa ghana ea peeps GDP Reco Slpienny nave srt he eclcal eln e wde resound sop the pedis of codon enter 8) tu) corn ucces une ectuseinenasmsionsen tks ML 129. Cowvergenee and the Dispersion ate Epa tame Cur cut fener it ais Wh ave elf prep ‘one expen athe er iy st ve er cated {ffm per opiate Tas avr cfd wien cere Ienigof compen hae eprint el per ap ane sre fecmomies teh fll nertine We show mw tnt en acne eae Sep sca ce don capa woe es mat se Sipe acc gostei = bee sali une In ce ie crepoodig camp ac onthe el pe eps tame for Sonyanhen spend e let) = 44 ttr a 2m wet and ae cant ith <2 and sw rate em The dni 6 > 0 ings stain woveete Secs esol out nyc nara med Awa tn ares toa ger eaeny wud converge The une em pet ape. ‘Sch tte prdtn hao he ig a's. We ane {chases henner alma ed idee oe ‘nc enue ft pein Realy of ects come the aye vavanecot ete) 2 ob Sa ee ihe sample mea of te) ee eager fs “ates he he saan ce ihe popu uae ad etme Fy (1.0) odevethe evan of Dy vets Dent BPD. +0, ‘histone deen eqn fr seins sed ste gen by = 0M -¥FL enc, en sn spe ls witb he senso omens (et bates he vate fhe dnc ts Ie pris DD Senift> Qarkng te 3 ‘xm es legging ican arc aa at, uc nae sehen ip Sietag sates nope