We analyze a simple and tractable model of occupational choice in the presence of credit market imperfections. We examine the effect of parameters governing technology and transaction costs, and history, in terms of the initial wealth distribution, in determining the long-term wealth...

This paper explores the impact of credit market on the entrepreneurs and demand for credit in a credit constrained economy and the resultant impact on the capital flows. In standard trade models the capital flows across countries are explained as a result of the rate of return differentials due...

Wealth inequalities both within and between nations has reached an extreme point and is continuing to increase (Collier P. The bottom billion: why the poorest countries are failing and what can be done about it. Oxford University Press, New York, 2007; Henneberg S, The wealth gaps. Farmington Hills:...

Per capita output is more volatile in middle-income economies than in both low-income and high-income economies. We examine this pattern in a two-period overlapping generations model with two productive sectors (a developed sector and a subsistence sector) and a credit sector. In the early and...