Quotation Kufenko, Vadim, Prettner, Klaus, Geloso, Vincent. 2020. Divergence, convergence, and the history-augmented Solow model. Structural Change and Economic Dynamics. 53 62-76.




We test the recently proposed history-augmented Solow model with respect to its predictions on the evolution of cross-country income inequality between nowadays industrialized countries. Using a broad range of deterministic and stochastic simulations, we illustrate that the model predicts the following pattern. There is low cross-country income inequality before the Industrial Revolution (during the period of “Malthusian Stagnation”), strongly increasing cross-country income inequality afterwards (the period of “The Great Divergence”), and finally declining cross-country income inequality toward a level that is higher than the level before the Industrial Revolution (the period of “Club Convergence”). Tests on the structural break of the observable time series of income dispersion and segmented regressions show that this development is fully consistent with the empirical evolution of cross-country income inequality since the late 19th century. Additional tests using quadratic polynomials, fractional polynomials, polynomial ridge regressions, and polynomial LASSO regressions confirm this finding.


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Status of publication Published
Affiliation External
Type of publication Journal article
Journal Structural Change and Economic Dynamics
Citation Index SSCI
WU-Journal-Rating new VW-D
Language English
Title Divergence, convergence, and the history-augmented Solow model
Volume 53
Year 2020
Page from 62
Page to 76
Reviewed? Y
URL https://www.sciencedirect.com/science/article/pii/S0954349X19300323
DOI https://doi.org/10.1016/j.strueco.2019.12.008
Open Access N


Prettner, Klaus (Details)
Geloso, Vincent (King's University College, Canada)
Kufenko, Vadim (University of Hohenheim, Germany)
Department of Economics (Crespo Cuaresma) (Details)
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