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Prices to value each country's quantities of ®nal goods and services. The quantities in all years are valued in 1990 international prices. S. 6, which provides yearly data for the 1950±1992 period for 152 countries. Observations for some countries in some years are not available. The Gheary-Khamis procedure to determine international prices is similarly employed. In contrast to Maddison (1995), Summers and Heston (1991) provide estimates of GDP both in 1985 international prices and in year t international prices.

25, and not a factor of 20. Savings rates in the rich countries would have to be 8,000 times higher than in the poor countries to account for a factor 20 difference in output levels. The empirical evidence does not even support the proposition that rich countries save a higher fraction of their output. 2 reports investment as a percentage of GDP averaged for the set of industrialized countries and for the set of developing countries for various years over the 1966±1993 period. These averages are from the International Monetary Fund (1994).

S. growth fact that investment share has been more or less constant in current prices, even though the price of investment has declined relative to the price of consumption. In constant prices, of course, investment share of product has increased over the last ®fty years. The effect of savings rates on relative steady-state incomes in this two-sector model is the same as in the onesector standard model. It is straightforward to show that per worker output for an economy with a gross savings rate s ˆ qt xt a yt converges to exactly the same expression as for the one-sector growth model.

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