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.
|Date of creation:||01 Nov 2001|
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- Askenazy, Philippe & Le Van, Cuong, 1999.
"A Model of Optimal Growth Strategy,"
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Levine's Working Paper Archive
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- Lisa Morhaim & Charles-Henri Dimaria & Cuong Le Van, 2002.
"The discrete time version of the Romer model,"
Springer;Society for the Advancement of Economic Theory (SAET), vol. 20(1), pages 133-158.
- 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.
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