Does empirical evidence show the type of economic convergence predicted by the Neoclassical growth model?

Yes
31% (27 votes)
No
69% (60 votes)
Total votes: 87

Comments

The model assumes that the way to increase GDP is to improve the provision of capital (K). That is, of what is produced in a year a part is saved and invested in accumulating more capital or fixed capital (buildings, machinery), so that the next year will produce a slightly more goods, as there will be more machinery available for production. Coming up to a steady state in which most growth occurs and investments associated exactly offset the depreciation of fixed capital wear. Under these circumstances 60% of the income gap in 1985 on a sample of ninety-eight countries seemed to be explicable. However, when calculated the implicit contribution of capital in national income from the model were found to be almost double that direct estimates. This posed a difficulty Solow model as an explanatory model since not all countries are equal and can not be applied in the same way

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Total votes: 27
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And the best evidence is the European Union. With the convergence funds are making that all the countries in the European union converge in a similar point of human and technology development.

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The problem of the neoclassical model is that not all countries are equal, nor have the same economic development.They will not converge because they have social and technological differences and their situations are very different.

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The Neoclassical growth model implies that a country grows by expending money on it, until it reaches a convergence limit, in which more capital does not mean more growth (due to the maintaining of what has been built). This is not always like this, since a lot of factors determine why a country grows. For example, there is the case of Venezuela, a country spending huge amounts of money without growing, because it is not used for the right purposes. So it could be said that the Neoclassical growth model might apply to those democratic countries, but not to the ones that do not have the "development" mentality or the "right" values for that purpose. 

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Countries grow by accumulating capital. When having decreasing returns to capital, there will be no longer possibility to maintain the previous amount of capital.

 

The convergence across countries is what this model predicts, because poor countries grow faster than developed ones, this has an empirical support and ends in a convergence among them. This convergence is obviously related to the limits to growth based in capital accumulation and the turning point when growth based in technology emerges. 

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neoclassical growth model implies that country grows by accumulating capital. the more capital it has, the more resources are needed to simply maintain what you have.

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neoclassical growth model implies that country grows by accumulating capital. the more capital it has, the more resources are needed to simply maintain what you have.

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The model would defend that countries with a lower development level will develop faster but is this the real case of every country? An example of this could be the rise of China. There is not necesarrily a convergence between China and the United States of America for example. Real data contradicts the neoclassical growth model because not every country can be treated as having equal conditions. 

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I disagree with the neoclassical growth model. This all comes from the western mentality wich just thinks in western countries but we cannot explain all the world just looking to Europe or U.S.A. so like we are talking about different countries we cannot say that this model works.

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I disagree. This theory emphasizes that technology change has a major influence on economic growth, and that technological advances happen by chance. The theory argues that econonomic growth will not continue unless there continues to be advances in technology.

 

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