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Early progress on the \\"problem of economic development\\"

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  • James A. Schmitz

Abstract

This study describes recent attempts to solve what Lucas has called the \\"problem of economic development\\"?the problem of accounting for the great disparity in per-capita output across countries. The study examines a number of economic development theories, including the neoclassical theory of growth, which relies on cross-country differences in physical capital per person to explain the disparity, and newer theories, which stress cross-country differences in human capital, or education. It is argued that these models cannot account for observed per-capita output diversity. More promising theories are those that stress differences in incentives for entrepreneurs to create businesses (i.e., business capital) and adopt new technologies.

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  • James A. Schmitz, 1993. "Early progress on the \\"problem of economic development\\"," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 17(Spr), pages 17-35.
  • Handle: RePEc:fip:fedmqr:y:1993:i:spr:p:17-35:n:v.17no.2
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    Cited by:

    1. José Ramón Ruiz-Tamarit, "undated". "Multiplicity, Overtaking and Convergence in the Lucas Two-Sector Growth Model," Working Papers 2002-17, FEDEA.
    2. Ruttan, Vernon W., 1998. "Growth Economics And Development Economics: What Should Development Economists Learn (If Anything) From The New Growth Theory?," Bulletins 12972, University of Minnesota, Economic Development Center.
    3. Boyan Jovanovic, 1995. "Learning and Growth," NBER Working Papers 5383, National Bureau of Economic Research, Inc.

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    Economic development;

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