From Autarky to Integration: Imitation, Foreign Borrowing, and Growth

September 1, 1998

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From Autarky to Integration: Imitation, Foreign Borrowing, and Growth, (USA: International Monetary Fund, 1998) accessed November 22, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The effects on growth of the integration of an autarkic country into the world economy are analyzed, focusing on the differing roles of imitation and innovation in human capital accumulation. The country initially concentrates on imitation of foreign knowledge; subsequently, as it approaches the knowledge frontier, innovation plays a greater role. Late developers catch up with the rest of the world more rapidly than early developers, reflecting the relatively large imitation opportunity available to them. Restrictions on foreign borrowing reduce the speed of adjustment to the steady state and lower growth and welfare for the country that imposes them.

Subject: Balance of payments, Capital controls, Consumption, Financial institutions, Human capital, Labor, National accounts, Stocks

Keywords: Accumulation function, Capital accumulation, Capital controls, Capital mobility, Consumption, Foreign Borrowing, Global, Growth, Human capital, Imitation, Innovation, Interest rate, Knowledge Gap, Mobility case, Stocks, WP

Publication Details

Pages:

35
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1998/140
Stock No:

WPIEA1401998
ISBN:

9781451928907
ISSN:

1018-5941

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