Nonhomothetic preferences, growth, trade and land
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.
|Date of creation:||Apr 1997|
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