Why is GDP so much more volatile in poor countries than in rich ones? To answer this question, we propose a theory of technological diversification. Production makes use of different input varieties, which are subject to imperfectly correlated shocks. As in endogenous growth models,...

Within a general equilibrium framework of a developing economy with a foreign owned factor of production, this paper questions whether the informal-formal sector relationship is procyclical/ complementary - expansion or contraction in one necessarily implies an expansion or contraction in the...

This paper critically discusses the theoretical and empirical literature on the quantitative and qualitative employment impact of technological change, compares the relative explanatory power of the competing theories, and explains in detail the macro and micro evidence on the issue, with...

Why is GDP so much more volatile in poor countries than in rich ones? To answer this question, we propose a theory of technological diversification. Production makes use of different input varieties, which are subject to imperfectly correlated shocks. As in endogenous growth models,...