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Nonhomothetic preferences, growth, trade and land

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  • Cristina Echevarria

    (University of Saskatoon)

Abstract

Nonhomothetic preferences with minimums of subsistence imply rates of investment that increasewith the level of income, and thus a positive correlation between growth rates and the level ofincome, at low levels of income. The existence of this positive correlation for a closed economywas already shown in a previous paper. The purpose of this paper is to show that, if we introduceland -a scarce resource that cannot be accumulated- in the model, this positive correlation existsfor an open economy as well.

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File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-1997-14.pdf
File Function: Fisrt version / Primera version, 1997
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Bibliographic Info

Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 1997-14.

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Length: 2 pages
Date of creation: Apr 1997
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasad:1997-14

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Keywords: Subsistence minimums; investment rates;

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