We study structural change in a simple, two-sector endogenous growth model and show that the presence of commodity-specific consumption externalities can be a source of structural change. When the degrees of consumption externalities are different between different goods, the two sectors grow at...

This paper (i) examines the role of income distribution in the determination of the average saving rate and the growth process in dual and mature economies, and (ii) revisits the Pasinetti and neo-Pasinetti theorems. The profit share may in uence saving because of differences in the saving rates...

This paper provides experimental evidence of the role of higher order risk attitudes - especially prudence - in prevention behavior. Prudence, under an expected utility framework, increases (decreases) self-protection effort compared to the risk neutral level when the risk of losing part of an...

We address the local home environment externality conceptualized by Galor and Tsiddon (1997a; 1997b) in the two sector growth model of Lucas (1988). We show that this version of externality related to human capital accumulation process can be a source of indeterminacy. -- Local home environmental...

This paper combines three prototype endogenous growth models, the models with human capital accumulation introduced by Uzawa [1965] and Lucas [1988], variety expansion by Romer [1990], and quality improvements by Aghion and Howitt [1992], in order to investigate how these three engines of growth...

Growth is endogenous in small open economies with substantial hidden or open unemployment, even under constant returns to scale. Growth promoting policies, however, have implications for the balance of trade, and two instruments are needed in order to achieve targets for both the growth rate and...

This paper derives the balance of payments-constrained growth (BPCG) model as a special case of a three good framework that incorporates exportables, importables, and non-tradables. The conditions under which the canonical form of the BPCG rate can be derived are made explicit and the...

Successful economic development to a large extent derives from the mobilization of underemployed resources. Demand policy can play an important role. It is critical, however, to consider balance of payments constraints and to ensure an expansion of investment in the modern sector. A combination...

Growth in low-income developing economies with large sectors charac- terized by underemployment is unlikely to be wage-led in the traditional neo-Kaleckian sense of the term. Output and employment in the sectors of the economy producing non-tradable output could be demand-led, how- ever, and...

The emphasis in post-Keynesian macroeconomics on wage- versus profit- led growth may not have been helpful. The profit share is not an exogenous variable, and the correlations between the pro.t share and economic growth can be positive for some exogenous shocks but negative for others. The...