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Nonhomothetic preferences, growth, trade and land

Author

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  • Cristina Echevarria

    (University of Saskatoon)

Abstract

Nonhomothetic preferences with minimums of subsistence imply rates of investment that increasewith the level of income, and thus a positive correlation between growth rates and the level ofincome, at low levels of income. The existence of this positive correlation for a closed economywas already shown in a previous paper. The purpose of this paper is to show that, if we introduceland -a scarce resource that cannot be accumulated- in the model, this positive correlation existsfor an open economy as well.

Suggested Citation

  • Cristina Echevarria, 1997. "Nonhomothetic preferences, growth, trade and land," Working Papers. Serie AD 1997-14, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  • Handle: RePEc:ivi:wpasad:1997-14
    as

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    References listed on IDEAS

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    Keywords

    Subsistence minimums; investment rates;

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