A Rostovian model of endogenous growth and underdevelopment traps


Zilibotti, Fabrizio (1995) A Rostovian model of endogenous growth and underdevelopment traps. European Economic Review, 39, (8), 1569-1602. (doi:10.1016/0014-2921(94)00027-W).

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Description/Abstract

The paper presents a model which combines self-sustained growth and '‘underdevelopment traps’ into a common analytical framework. We provide an analytical interpretations to Rostow's observation that there is ‘a decisive interval in the history of a society when growth becomes its normal condition’' and to the empirical evidence that some countries seem not to have achieved this stage yet. The model exhibits aggregate non-convexities and thresholds which separate a region where growth is ‘Solow-type’, with convergence to a stationary steady-state from a region where growth is ‘Romer-type’, with endogenous self-sustained growth. In some critical stages of development there exist multiple equilibrium trajectories, consistent with alternative sets of self-fulfilling beliefs.

Item Type: Article
ISSNs: 0014-2921 (print)
Related URLs:
Keywords: underdevelopment traps, thresholds, externalities, technical progress
Subjects: H Social Sciences > HB Economic Theory
Divisions: University Structure - Pre August 2011 > School of Social Sciences > Economics
ePrint ID: 33090
Date Deposited: 13 Dec 2007
Last Modified: 27 Mar 2014 18:20
URI: http://eprints.soton.ac.uk/id/eprint/33090

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