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Note 3
Econ 4450 (2010)
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View Full Document The globalized economic environment
Some background of physiology is the prerequisite for
medicine.
The same can be said about the world economy
for industrial policy.
Chapter 1 of Wan (2004)
Article 13 of Wan (2006).
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•
This is a period in which America is the indisputable
technological leader with a per capital real income a(t)
which is both higher than almost all countries and
growing at more or less a constant annual rate:
k
≈
3%
3
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For any other economies, say, i,
denote its per capita real income as a(t)y(t; i),
where y(t; i) is real per capita GDP of economy i relative to the US,
then there is a quasiconcave function:
F[y(t, i), 1  y(t, i);
θ
(i)]
such that:
(4.1)
d log y(t, i)/dt = F[y(t, i), 1  y(t, i);
θ
(i)] – k,
so that the growth rate of the per capita real GDP of country i is:
(4.2)
d log [a y(t, i)]/dt = d log a/dt + d log y(t, i)/dt
= k +{F[y(t, i), 1  y(t, i);
θ
(i)] – k}
=
F[y(t, i), 1  y(t, i);
θ
(i).
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This note was uploaded on 04/29/2010 for the course ECON 4450 taught by Professor Wan during the Spring '09 term at Cornell University (Engineering School).
 Spring '09
 WAN

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