Many empirical works suggest that education has a positive effect on earnings not only because it raises human capital but also because it functions as a signal when employers have incomplete information on employees' skills.The signaling role could have important consequences on the dynamics of...

This paper develops a dynamic dual-economy model and examines how the long-run outcome of an economy depends on the initial distribution of wealth and sectoral productivity.It is shown that, for fast transformation into a developed economy, the initial distribution must be such that extreme...