This paper considers heterogeneities in preferences over the local public good, human capital formation, and residential locations as primary underlying forces of economic stratification in an endogenously growing economy. We construct a two-period overlapping-generations model with two regions...

Existing theories that emphasize the significance of financial intermediation for economic development have not addressed two important empirical facts: (i) the relationship between financial and real activities depends crucially on the stage of development, and (ii) financial and industrial...

This paper develops an endogenous growth model of occupational choice with overlapping generations heterogeneous in entrepreneurial ability. While an increase in the number of entrepreneurs creates a growth-enhancing variety effect, the reduced overall quality of entrepreneurial ability retards...