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

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Abstract

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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  • Nicola Cetorelli, 1998. "Could Prometheus be bound again? a contribution to the convergence controversy," Working Paper Series WP-98-3, Federal Reserve Bank of Chicago.
    • Handle: RePEc:fip:fedhwp:wp-98-3
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    Cited by:

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    2. Gancia, Gino & Zilibotti, Fabrizio, 2005. "Horizontal Innovation in the Theory of Growth and Development," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 3, pages 111-170, Elsevier.
    3. Alejandro Diaz Bautista & Mauro Diaz Dominguez, 2004. "Capital Humano y Crecimiento Económico en México (1970-2000). Human Capital and Economic Growth in Mexico," Urban/Regional 0405008, University Library of Munich, Germany.
    4. Efthymios G. Tsionas & Loukas Theocharis, 2008. "Prometheus Bound: Polarization Is Possible In The Neoclassical Growth Model," Metroeconomica, Wiley Blackwell, vol. 59(2), pages 203-211, May.
    5. M. Herrerías, 2012. "Weighted convergence and regional growth in China: an alternative approach (1952–2008)," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(3), pages 685-718, December.
    6. Maki, Taichi & Yotsuya, Koichi & Yagi, Tadashi, 2005. "Economic growth and the riskiness of investment in firm-specific skills," European Economic Review, Elsevier, vol. 49(4), pages 1033-1049, May.

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