Core and Periphery in the World Economy: An Empirical Assessment of the Dependence of Third World Growth on the Developed Countries

SIUC Paper #96-09

Posted: 1 Sep 1999

See all articles by Julius Horvath

Julius Horvath

Central European University (CEU) - Department of Economics

Richard Grabowski

Southern Illinois University - Southern Illinois University at Carbondale

Date Written: Undated

Abstract

This paper classifies the relationship between the developed and developing countries into three categories: strong dependency, weak dependency and independence of the developing country on the developed world (G-7). A country is characterized as strongly (weakly) dependent when it has a negative (positive) response to permanent shocks originating from the center and the weight of these shocks is relatively important in explaining total variation in the output of the developing country. Independence is characterized with low weight of shocks from the center. The results of a dynamic vector autoregressive model suggest that from the sample of 86 developed countries only five of them could be considered strongly dependent, while the others are roughly divided equally into weakly dependent and independent.

JEL Classification: F02, F43, O50, E11

Suggested Citation

Horvath, Julius and Grabowski, Richard L., Core and Periphery in the World Economy: An Empirical Assessment of the Dependence of Third World Growth on the Developed Countries (Undated). SIUC Paper #96-09, Available at SSRN: https://ssrn.com/abstract=5047

Julius Horvath (Contact Author)

Central European University (CEU) - Department of Economics ( email )

Nador u. 9.
Budapest H-1051
Hungary
36-1-327-3248 (Phone)
36-1-327-3243 (Fax)

Richard L. Grabowski

Southern Illinois University - Southern Illinois University at Carbondale ( email )

Rehn Hall - Mail Code 4626
Carbondale, IL 62901-4515
United States

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