This paper addresses the limitations of Modern Money Theory (MMT) as a guide to development policy. We explore two central questions on this topic: whether MMT policies 1) ought to be implemented in low- and middle-income economies and 2) can be implemented. In relation to the first question, we...

This chapter on urbanization and growth focuses on modeling and empirical evidence that pertain to a number of inter-related questions. Why do cities form in an economy, with so much of economic activity in countries geographically concentrated in cities? Second, how do different types of cities...

One of the most outstanding accomplishments of the economic science over the last decades is the development of a sound and coherent theory of economic growth. Research in growth theory has demonstrated that significant and systematic increases in well-being are attainable whenever the right...

This paper presents a re-interpretation of a New Keynesian model with capital, where zero long-run output gap restriction is eliminated and a certain type of assumption regarding risk-less nominal interest rate is adopted

This paper opens up a study of economic convergence in Asia. This convergence refers to the ability of developing economies to catch up with the developed ones in terms of levels and growth rates of real per capita GDP. The study uses the lens of neoclassical growth models, both the basic models...

We analyze a generalized neoclassical growth model that combines a normalized CES production function and possible asymmetries of savings out of factor incomes. This generalized model helps to shed new light on a recent debate concerning the impact of factor substitution and income distribution...

The nature of energy and material resources in an endogenous growththeory framework isclarified. This involves three modifications of the conventionaltheory. Firstly, multiple feedbackmechanisms or “growth engines” are identified. Secondly, a productionfunction distinguishesbetween resource...

We analyze a generalized neoclassical growth model that combines a normalized CES production function and possible asymmetries of savings out of factor incomes. This generalized model helps to shed new light on a recent debate concerning the impact of factor substitution and income distribution...

A common perception about the neoclassical growth model is that an economy devoid of capital cannot evolve to strictly positive levels of output if capital is essential. We challenge this view by positing a broad class of production functions, encompassing the neoclassical production function,...

In a neoclassical economy with endogenous capital- and labor-augmenting technical change the steady-state growth rate of output per worker is shown to increase in the elasticity of substitution between capital and labor. This confirms the assessment of Klump and de La Grandville (2000) that the...