Productivity Differences Between and Within Countries
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NBER Working Paper No. 15155*
Issued in July 2009
NBER Program(s): IFM
EFG
POL
We document substantial within-country (cross-municipality) differences in incomes for a large number of countries in the Americas. A significant fraction of the within-country differences cannot be explained by observed human capital. We conjecture that the sources of within-country and between-country differences are related. As a first step towards a united framework, we propose a simple model incorporating both differences in technological know-how across countries and differences in productive efficiency within countries.
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