Journal of Economic Growth

, Volume 6, Issue 1, pp 5–37 | Cite as

Global Income Divergence, Trade, and Industrialization: The Geography of Growth Take-Offs

  • Richard E. Baldwin
  • Philippe Martin
  • Gianmarco I. P. Ottaviano
Article

Abstract

This article formalizesthe theoretical interconnections among four post–industrialrevolution phenomena—the industrialization and growth take-offof rich northern nations, massive global income divergence, andrapid trade expansion. In stages-of-growth model, the four phenomenaare jointly endogenous and are triggered by falling trade costs.In the first growth stage (with high trade costs) industry isdispersed internationally, and growth is low. In the second (mediumtrade costs), the North industrializes rapidly, growth take-off,and the South diverges. In the third (low trade costs), highgrowth and global divergence become self-sustaining. In the fourthstage, when the cases of ``trading'' ideas decreases, the Southquickly industrializes and converges.

growth take-off industrial revolution economic geography endogenous growth trade and development 

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Copyright information

© Kluwer Academic Publishers 2001

Authors and Affiliations

  • Richard E. Baldwin
    • 1
  • Philippe Martin
    • 2
  • Gianmarco I. P. Ottaviano
    • 3
  1. 1.Institute of International StudiesGenevaSwitzerland
  2. 2.CERAS-ENPCParis
  3. 3.Bocconi University and CEPRSwitzerland

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