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Stages of Growth in Economic Development

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  • Michal Kejak

    (CERGE-EI)

Abstract

The paper analyses a two-sector model of endogenous growth with two common features of economic development: stages of sustained growth and underdevelopment traps. The model also demonstrates the transitional issues of a temporary underdevelopment trap, seemingly sustainable growth, and a slowdown in productivity growth. The temporary underdevelopment trap occurs when the economy exhibits a regime of extensive growth (i.e. slowly declining growth in physical capital with no growth in human capital) but then starts a transition to a sustained growth. The seemingly sustainable growth occurs when the economy exhibits a regime of intensive growth (i.e. both capitals are growing) but the growth of human capital ceases and the economy eventually finishes in a zero growth trap. The slowdown in productivity growth occurs when the transition from low growth stage to high growth stage is not monotonic.

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File URL: http://128.118.178.162/eps/dev/papers/0012/0012014.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Development and Comp Systems with number 0012014.

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Length: 35 pages
Date of creation: 19 Feb 2001
Date of revision:
Handle: RePEc:wpa:wuwpdc:0012014

Note: Type of Document - Acrobat PDF; pages: 35 ; figures: Included
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Web page: http://128.118.178.162

Related research

Keywords: Two-Sector Growth Models; Economic Growth and Aggregate Productivity; Macroeconomic Analysis of Economic Development; Human Resources; Human Capital Formation;

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References

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  1. Mulligan, Casey B & Sala-i-Martin, Xavier, 1993. "Transitional Dynamics in Two-Sector Models of Endogenous Growth," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 108(3), pages 739-73, August.
  2. Azariadis, Costas & Drazen, Allan, 1990. "Threshold Externalities in Economic Development," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 105(2), pages 501-26, May.
  3. Michal Kejak, 2001. "Stages of Growth in Economic Development," Development and Comp Systems, EconWPA 0012014, EconWPA.
  4. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 94(5), pages 1002-37, October.
  5. Benhabib Jess & Perli Roberto, 1994. "Uniqueness and Indeterminacy: On the Dynamics of Endogenous Growth," Journal of Economic Theory, Elsevier, Elsevier, vol. 63(1), pages 113-142, June.
  6. Ladron-de-Guevara, Antonio & Ortigueira, Salvador & Santos, Manuel S., 1997. "Equilibrium dynamics in two-sector models of endogenous growth," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 21(1), pages 115-143, January.
  7. Kejak, Michal, 1995. "Application of Projection Method in a Model of Endogenous Growth," Economics Series, Institute for Advanced Studies 7, Institute for Advanced Studies.
  8. Zilibotti, Fabrizio, 1995. "A Rostovian model of endogenous growth and underdevelopment traps," European Economic Review, Elsevier, Elsevier, vol. 39(8), pages 1569-1602, October.
  9. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, Elsevier, vol. 34(2), pages 143-173, October.
  10. Xie Danyang, 1994. "Divergence in Economic Performance: Transitional Dynamics with Multiple Equilibria," Journal of Economic Theory, Elsevier, Elsevier, vol. 63(1), pages 97-112, June.
  11. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, Elsevier, vol. 22(1), pages 3-42, July.
  12. Caballe, Jordi & Santos, Manuel S, 1993. "On Endogenous Growth with Physical and Human Capital," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 101(6), pages 1042-67, December.
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Citations

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Cited by:
  1. Agénor, Pierre-Richard, 2010. "A theory of infrastructure-led development," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 34(5), pages 932-950, May.
  2. Irmen, Andreas, 2005. "Extensive and intensive growth in a neoclassical framework," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 29(8), pages 1427-1448, August.
  3. Daniel Ventosa-Santaularia & Antonio E. Noriega, 2005. "Spurious regression under broken trend stationarity," Computing in Economics and Finance 2005, Society for Computational Economics 186, Society for Computational Economics.
  4. Kejak, Michal & Seiter, Stephan & Vavra, David, 2004. "Accession trajectories and convergence: endogenous growth perspective," Structural Change and Economic Dynamics, Elsevier, Elsevier, vol. 15(1), pages 13-46, March.
  5. Kejak, Michal, 2003. "Stages of growth in economic development," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 27(5), pages 771-800, March.
  6. Drivas, Kyriakos & Economidou, Claire & Tsionas, Efthymios G., 2014. "A Poisson Stochastic Frontier Model with Finite Mixture Structure," MPRA Paper 57485, University Library of Munich, Germany.
  7. repec:gua:wpaper:em200501 is not listed on IDEAS
  8. Paap, Richard & Franses, Philip Hans & van Dijk, Dick, 2005. "Does Africa grow slower than Asia, Latin America and the Middle East? Evidence from a new data-based classification method," Journal of Development Economics, Elsevier, Elsevier, vol. 77(2), pages 553-570, August.
  9. Hagemann, Harald, 2004. "The macroeconomics of accession: growth, convergence and structural adjustment," Structural Change and Economic Dynamics, Elsevier, Elsevier, vol. 15(1), pages 1-12, March.
  10. Michal Kejak & David Vavra, 2004. "Factor Accumulation Story: Any Unfinished Business?," CERGE-EI Working Papers, The Center for Economic Research and Graduate Education - Economic Institute, Prague wp220, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  11. Bos, J.W.B. & Economidou, C. & Koetter, M. & Kolari, J.W., 2010. "Do all countries grow alike?," Journal of Development Economics, Elsevier, Elsevier, vol. 91(1), pages 113-127, January.

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