Quality Of Knowledge Technology, Returns To Production Technology, And Economic Development
Presenting a discrete time version of the Romer (1986) model, this paper analyzes optimal paths in a one-sector growth model when the technology is not convex. We prove that for a given quality of knowledge technology, the countries could take-off if their initial stock of capital are above a critical level; otherwise they could face a poverty-trap. We show that for an economy which wants to take-off by means of knowledge technology requires three factors : large amount of initial knowledge, small fixed costs and a good quality of knowledge technology.
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Volume (Year): 8 (2004)
Issue (Month): 02 (April)
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- Le Van, C. & Morhaim, L. & Dimaria, C.-H., 2000.
"The Discrete Time Version of the Romer Model,"
Papiers d'Economie MathÃ©matique et Applications
2000.63, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
- Romer, Paul M, 1986.
"Increasing Returns and Long-run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 94(5), pages 1002-37, October.
- Askenazy, Philippe & Le Van, Cuong, 1999.
"A Model of Optimal Growth Strategy,"
Journal of Economic Theory,
Elsevier, vol. 85(1), pages 24-51, March.
- Majumdar, Mukul & Mitra, Tapan, 1982. "Intertemporal allocation with a non-convex technology: The aggregative framework," Journal of Economic Theory, Elsevier, vol. 27(1), pages 101-136, June.
- Tjalling C. Koopmans, 1963. "On the Concept of Optimal Economic Growth," Cowles Foundation Discussion Papers 163, Cowles Foundation for Research in Economics, Yale University.
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