?url_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Adc&rft.relation=https%3A%2F%2Fmpra.ub.uni-muenchen.de%2F20056%2F&rft.title=Growth+and+convergence%2Fdivergence+in+productivity+under+balance-of-payments+constraint&rft.creator=Perez+Caldentey%2C+Esteban&rft.creator=Ali%2C+Anesa&rft.subject=O1+-+Economic+Development&rft.subject=O54+-+Latin+America+%3B+Caribbean&rft.subject=R11+-+Regional+Economic+Activity%3A+Growth%2C+Development%2C+Environmental+Issues%2C+and+Changes&rft.description=This+paper+presents+a+model+of+convergence%2Fdivergence+in+productivity+for+two+economies+of+different+size+and+development+building+on+Kaldor%E2%80%99s+cumulative+causation+and+the+technological+gap+approaches+to+growth.++Both+operate+within+the+logic+provided+by+a+balance-of-payments+constraint+framework.+The+more+developed+and+larger+economy%2C+the+leader%2C+is+technologically+more+advanced+with+higher+levels+of+productivity+and+issues+the+international+reserve+currency.+The+developing+economy%2C+the+follower%2C+is+closely+linked+to+the+leader+economy+and+is+balance-of-payments-constrained+(BPC).+The+paper+argues+that+the+growth+of+the+leader+has+at+the+same+time+divergent+and+convergent+effects+on+the+productivity+gap+between+both+economies.+The+divergent+effect+(the+Kaldor+effect)+works+through+a+process+of+induced+productivity+and+cumulative+causation.+The+convergent+effect+(Thirlwall%E2%80%99s+Law)+works+through+the+BPC+constraint.+The+model+states+that+growth+with+convergence+in+productivity+requires+that+the+ratio+of+export+to+import+income+elasticities+of+the+follower+economy+exceeds+the+ratio+of+the+induced+productivity+of+the+leader+economy+to+that+of+the+follower+economy.+The+paper+then+highlights+the+difficulty+of+achieving+convergence+under+a+BPC+constraint+and+provides+policy+implications.&rft.date=2010-04&rft.type=MPRA+Paper&rft.type=NonPeerReviewed&rft.format=application%2Fpdf&rft.language=en&rft.identifier=https%3A%2F%2Fmpra.ub.uni-muenchen.de%2F20056%2F1%2FMPRA_paper_20056.pdf&rft.identifier=++Perez+Caldentey%2C+Esteban+and+Ali%2C+Anesa++(2010)%3A+Growth+and+convergence%2Fdivergence+in+productivity+under+balance-of-payments+constraint.++++&rft.language=en