According to New Growth Theory one can not rely on the convergence mechanisms inherent in traditional neoclassical … constant returns to scale models. Convergence as well as divergence is possible, in general, depending on the assumptions about … conditions divergence, convergence or a stable centre-periphery structure emerge. The model allows for different degrees of …

-specific knowledge, we show that there is convergence to a symmetric steady state under balanced trade. Under perfect mobility of …