Deep Determinants of relative per-capita GDPs, Argentina-Canada from 1870

GERMAN HECTOR GONZALEZ; VIEGO, VALENTINA

Córdoba

Congreso; XLIII REUNION ANUAL DE LA ASOCIACION ARGENTINA DE ECONOMIA POLITICA; 2008

AAEP

Argentina and Canada showed until beginning of World War II similar per-capita GDPs. Both economies had started their industrialization processes while exporting natural resource intensive products and importing capital goods. Both were also barely populated but received significant inflows of European immigrants since the second half of the XIXth century. However after the mid-1930s, the gap between both per-capita GDPs began to grow, accelerating later in the century. This experience was studied by a literature that, on one hand, tries to determine the precise moment in which the divergence began while on the other tries to explain why Argentina could not to break that trend and catch up with Canada. In this sense, we carry out an empirical study of the deep determinants (Rodrik, 2003) of the divergence process between both economies. Although similar exercises have been run in the past, our proposal relies upon a different methodology. More precisely, we test econometrically both new and old hypotheses, while specific points in time we use to assess consistency of those results.