Do all economies grow equally fast?

Yaniv Dover, Sonia Moulet, Sorin Solomon, Gur Yaari*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

Abstract

The stochastic spatially extended generalized Lotka-Volterra approach introduced in Economics: The Open-Access, Open-Assessment E-Journal (2009), http://www.economics-ejournal.org/economics/discussionpapers/2009-6, Applications of Simulation to Social Sciences, 2000, pp. 301-322 and The European Physical Journal B 62(4) (2008), 505-513, is extended to the study of interactions between economic sectors, countries and blocks. The theory predicts robustly in a very wide range of conditions systematic regularities in the growth rates evolution of various sub-systems. The J-curve phenomenon which was studied in Economics: The Open-Access, Open-Assessment E-Journal (2009), http://www.economics-ejournal.org/economics/discussionpapers/2009-6, is revisited and more empirical support is given to the theory. In particular to the connection between the economic minimum and the crossover of the new emergent leading sector with the old decaying one. We describe the 'Growth Alignment Effect' (GAE), it's theoretical basis and demonstrate it empirically for numerous cases in the inter-national and intra-national economies. The GAE is the concept that in steady state the growth rates of the GDP per capita of the various system components align. We differentiate the GAE predictions from the usual convergence or divergence conceptual framework. Further investigations of GAE and subsidiaries are suggested and possible uses are proposed. Due to it's simple and robust nature, the method can be used as a tool for economic decisions and policy making.

Original languageEnglish
Pages (from-to)171-185
Number of pages15
JournalRisk and Decision Analysis
Volume1
Issue number3
DOIs
StatePublished - 2009

Keywords

  • Economic growth
  • J-curve
  • growth alignment effect
  • growth clubs
  • growth convergence

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