A Rostovian model of endogenous growth and underdevelopment traps
A Rostovian model of endogenous growth and underdevelopment traps
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.
underdevelopment traps, thresholds, externalities, technical progress
1569-1602
Zilibotti, Fabrizio
4e5e129e-cb11-4b09-8ba4-ce400e638712
October 1995
Zilibotti, Fabrizio
4e5e129e-cb11-4b09-8ba4-ce400e638712
Zilibotti, Fabrizio
(1995)
A Rostovian model of endogenous growth and underdevelopment traps.
European Economic Review, 39 (8), .
(doi:10.1016/0014-2921(94)00027-W).
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.
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Published date: October 1995
Keywords:
underdevelopment traps, thresholds, externalities, technical progress
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Local EPrints ID: 33090
URI: http://eprints.soton.ac.uk/id/eprint/33090
ISSN: 0014-2921
PURE UUID: cef2870c-ad2d-4f63-afec-519a062b0a54
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Date deposited: 13 Dec 2007
Last modified: 17 Jul 2017 15:54
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Author:
Fabrizio Zilibotti
University divisions
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