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Quality of Knowledge Technology, Returns to Production Technology and Economic Development

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Author Info
Cuong LE VAN (University of Paris I)
H. Cagri SAGLAM (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

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Abstract

Presenting a discrete time version of the Romer (1986) model, this paper analyzes optimal paths in a one-sector growth model when the technology is not convex. We prove that for a given quality of knowledge technology, the countries could take-off if their initial stock of capital are above a critical level; otherwise they could face a poverty-trap. We show that for an economy which wants to take-off by means of knowledge technology requires three factors : large amount of initial knowledge, small fixed costs and a good quality of knowledge technology.

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Publisher Info
Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) with number 2002004.

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Length: 14
Date of creation: 01 Nov 2001
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Handle: RePEc:ctl:louvir:2002004

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Related research
Keywords: Optimal Growth; optimal path; value fuction; poverty-trap; increasing returns;

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Find related papers by JEL classification:
C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis
O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

References listed on IDEAS
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  1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October. [Downloadable!] (restricted)
  2. Benhabib, Jess & Nishimura, Kazuo, 1983. "Competitive Equilibrium Cycles," Working Papers 83-30, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
  3. Le Van, C. & Morhaim, L. & Dimaria, C.-H., 2000. "The Discrete Time Version of the Romer Model," Papiers d'Economie Mathématique et Applications 2000.63, Université Panthéon-Sorbonne (Paris 1).
  4. Tjalling C. Koopmans, 1963. "On the Concept of Optimal Economic Growth," Cowles Foundation Discussion Papers 163, Cowles Foundation, Yale University. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Nguyen, Ngoc Anh & Pham, Quang Ngoc & Nguyen, Dinh Chuc & Nguyen, Duc Nhat, 2007. "Innovation and Export of Vietnam’s SME Sector," MPRA Paper 3256, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  2. Olivier Bruno & Cuong Van & Benoît Masquin, 2009. "When does a developing country use new technologies?," Economic Theory, Springer, vol. 40(2), pages 275-300, August. [Downloadable!] (restricted)
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