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

35 Pages Posted: 15 Feb 2006

See all articles by Rachel van Elkan

Rachel van Elkan

International Monetary Fund (IMF)

Date Written: September 1998

Abstract

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.

Keywords: Growth, Imitation, Innovation, Knowledge Gap, Foreign Borrowing

JEL Classification: F15, F43, O31, O41

Suggested Citation

Elkan, Rachel van, From Autarky to Integration: Imitation, Foreign Borrowing, and Growth (September 1998). IMF Working Paper No. 98/140, Available at SSRN: https://ssrn.com/abstract=882704

Rachel van Elkan (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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