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

Listed author(s):
  • Nicola Cetorelli

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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File URL: http://www.chicagofed.org/digital_assets/publications/working_papers/1998/wp98_3.pdf
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Paper provided by Federal Reserve Bank of Chicago in its series Working Paper Series with number WP-98-3.

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Date of creation: 1998
Handle: RePEc:fip:fedhwp:wp-98-3
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