This paper analyzes optimal paths in a one-sector growth model when the technology is not convex. In such a case, we prove that optimal paths converge to the upper steady state iff the initial wealth is above a critical level. Then we first show that thanks to debt and/or R&D the poverty trap may be avoided. Second, we introduce a distorsion : corruption which mostly has dramatic consequences on growth. These results may explain why empirical works lead to the conclusion of non convergence in large cross-country samples.
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Find related papers by JEL classification: D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption F34 - International Economics - - International Finance - - - International Lending and Debt Problems I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D
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