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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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.
|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
|Date Deposited:||13 Dec 2007|
|Last Modified:||06 Aug 2015 02:30|
|RDF:||RDF+N-Triples, RDF+N3, RDF+XML, Browse.|
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