The Stable Transformation Path / Francisco J. Buera, Joseph P. Kaboski, Martí Mestieri, Daniel G. O'Connor.

Format:

Book

Author/Creator:

Buera, Francisco J.

Contributor:

National Bureau of Economic Research.

Kaboski, Joseph P.

Mestieri, Martí.

O'Connor, Daniel G.

Series:

Working Paper Series (National Bureau of Economic Research) no. w27731.

NBER working paper series no. w27731

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

Dynamic models of structural transformation are often non-stationary, precluding balanced growth path (BGP) analysis. We develop a generalization of the BGP concept that we call a Stable Transformation Path (STraP). The STraP characterizes the medium-term dynamics of the economy in a turnpike sense; it is the non-stationary path toward which the economy (quickly) con- verges from an arbitrary initial capital stock. Calibrated simulations demonstrate that these medium-term dynamics have important quantitative implications for structural transformation, investment, and growth, including slow convergence. Medium-term dynamics alone account for the observed 40% secular decline in average growth rates across stages of development.

Notes:

Print version record

August 2020.