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Transitional Growth Paths in Developing Economies

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Author Info

  • Robertson, P. E.

Abstract

This paper develops model of growth in an economy where the capital stock is rationed across labour inputs, as in the dual, or segmented, labour market literature on developing economies. In this economy, the increased use of labour in the formal sectors can sustain high marginal and average products of capital and high growth rates for periods of 15-30 years. This provides an interesting insight into the current growth and convergence debate. The model is shown to overcome the empirical problems of the standard Ramsey growth model and also avoids some recent criticisms of endogenous growth models.

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Bibliographic Info

Paper provided by New South Wales - School of Economics in its series Papers with number 97/7.

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Length: 22 pages
Date of creation: 1997
Date of revision:
Handle: RePEc:fth:nesowa:97/7

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Postal: THE UNIVERSITY OF NEW SOUTH WALES, SCHOOL OF ECONOMICS, P.O.B. 1 KENSINGTON, NEW SOUTH WALES 2033 AUSTRALIA.
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Web page: http://www.economics.unsw.edu.au/
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Keywords: GROWTH MODELS ; ECONOMIC DEVELOPMENT ; TECHNOLOGICAL CHANGE ; LABOUR MARKET;

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