The Poverty of Nations: A Quantitative Exploration / V. V. Chari, Patrick J. Kehoe, Ellen R. McGrattan.

Format:

Book

Author/Creator:

Chari, V. V.

Contributor:

National Bureau of Economic Research.

Kehoe, Patrick J.

McGrattan, Ellen R.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5414.

NBER working paper series no. w5414

Language:

English

Subjects (All):

Income distribution--Econometric models.

Income distribution.

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

The Poverty of Nations

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1996.

Cambridge, Massachussetts : National Bureau of Economic Research, [1996]

Summary:

We document regularities in the distribution of relative incomes and patterns of investment in countries and over time. We develop a quantitative version of the neoclassical growth model with a broad measure of capital in which investment decisions are affected by distortions. These distortions follow a stochastic process which is common to all countries. Our model generates a panel of outcomes which we compare to the data. In both the model and the data, there is greater mobility in relative incomes in the middle of the income distribution than at the extremes. The 10 fastest growing countries and the 10 slowest growing countries in the model have growth rates and investment-output ratios similar to those in the data. In both the model and the data, the `miracle' countries have nonmonotonic investment-output ratios over time. The main quantitative discrepancy between the model and the data is that there is more persistence in growth rates of relative incomes in the model than in the data.

Notes:

Print version record

January 1996.