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Could Prometheus be bound again? A contribution to the convergence controversy

  • Cetorelli, Nicola

This paper presents a model of stochastic growth in which the probability of adverse shocks to production is inversely related to the aggregate stock of capital per capita. Postulating this endogenous relationship, justified by empirical evidence, the model yields long-run predictions consistent with the recent findings of cross-country club convergence and intra-distribution mobility.

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Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

Volume (Year): 27 (2002)
Issue (Month): 1 (November)
Pages: 29-50

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Handle: RePEc:eee:dyncon:v:27:y:2002:i:1:p:29-50
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