## From Autarky to Integration: Imitation, Foreign Borrowing, and Growth

_IMF Working Papers, September 1, 1998_

## Source details

**Canonical URL:** [From Autarky to Integration: Imitation, Foreign Borrowing, and Growth](https://www.imf.org/en/publications/wp/issues/2016/12/30/from-autarky-to-integration-imitation-foreign-borrowing-and-growth-2756)

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## Bibliographic details
- Published: September 1, 1998
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451928907.001

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### Overview
- Analyzes effects on growth when an autarkic country integrates into the world economy.
- Focuses on differing roles of imitation and innovation in human capital accumulation.
- Describes a transition where the country initially concentrates on imitation of foreign knowledge and, as it approaches the knowledge frontier, innovation plays a greater role.
- Finds that late developers catch up with the rest of the world more rapidly than early developers because of a relatively large imitation opportunity.
- Concludes that restrictions on foreign borrowing reduce the speed of adjustment to the steady state and lower growth and welfare for the country that imposes them.

### Key findings
- The country initially concentrates on imitation of foreign knowledge; subsequently, as it approaches the knowledge frontier, innovation plays a greater role.
- Late developers catch up with the rest of the world more rapidly than early developers, reflecting the relatively large imitation opportunity available to them.
- Restrictions on foreign borrowing reduce the speed of adjustment to the steady state and lower growth and welfare for the country that imposes them.

### Policy implications and scenarios
- Policies that facilitate knowledge imitation can accelerate catch-up growth for late developers.
- As countries approach the knowledge frontier, policies that promote innovation become increasingly important.
- Restrictions on foreign borrowing are associated with slower adjustment to steady state and lower growth and welfare for the restricting country.

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## Content in this bundle

- **From Autarky to Integration Imitation, Foreign Borrowing, and Growth - WP/98/140**
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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/from-autarky-to-integration-imitation-foreign-borrowing-and-growth-2756_