Occupational Choice, Financial Market Imperfections and Development
AbstractWe develop a simple model of occupational choice under financial market im- perfections, in the presence of technological convexities. The aim is to analyze the quantitative effect of these imperfections on the level of income. We find that although their effect is relatively large, financial market imperfections alone are not able to explain the observed cross country difference in income. However, when interacted with the issue of mobility, those imperfections become much more relevant, to the point of pushing the economy into a development trap.
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Bibliographic InfoPaper provided by University of Milano-Bicocca, Department of Economics in its series Working Papers with number 49.
Length: 29 pages
Date of creation: Jan 2002
Date of revision: Jan 2002
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