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Barriers to Riches

by Edward C. Prescott

  • ISBN: 9780262161930
  • ISBN10: 0262161931

Barriers to Riches

by Edward C. Prescott

  • List Price: $55.00
  • Binding: Hardcover
  • Publisher: Mit Pr
  • Publish date: 09/01/2000
  • ISBN: 9780262161930
  • ISBN10: 0262161931
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Description: Why isn't the whole world as rich as the United States? Conventional views hold that differences in the share of output invested by countries account for this disparity. Not so, say Stephen Parente and Edward Prescott. Parente and Prescott argue that differences in Total Factor Productivity (TFP) explain this phenomenon. These differences exist because some countries erect barriers to the efficient use of readily available technology. The purpose of these barriers is to protect industry insiders with vested interests in current production processes from outside competition. Were this protection stopped, rapid TFP growth would follow in the poor countries, and the whole world would soon be rich.

Barriers to Riches reflects a decade of research by the authors. Like other books on the subject, it uses historical examples and industry studies to illuminate potential explanations for income differences. Unlike these other books, however, it uses aggregate data and general equilibrium models to evaluate the plausibility of alternative explanations. The result is the most complete and coherent treatment of the subject to date.

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