This work shows the asymmetric effect of the reduction in transportation costs across different sectors in the process of the Great Divergence. Specifically, the analysis indicates that reductions in transportation costs of industrial goods enhance convergence of the growth rates of trading economies. In contrast, reductions in transportation costs of nonindustrial goods contribute to a further divergence across countries.
|Number of pages||15|
|State||Published - 16 Sep 2014|
Bibliographical notePublisher Copyright:
© 2014 Cambridge University Press.
- Economic Growth
- International Trade
- Trade Costs
- Transportation Revolution