We develop a two-sector growth model distinguishing between a private sector consisting of profit-making firms and a state-controlled sector consisting of subsidized firms. Both sectors produce the same good. The private sector generates learning-by-doing and technological spillovers, while the...

We develop a growth model distinguishing between a private sector that generates learning-by-doing and technological spillovers and a sector of technologically obsolete and subsidised state-owned enterprises. This distinction allows us to trace the inescapable dual-economy stage of development...

This study analyzes the effects of directed lending upon total factor productivity and GDP growth in Belarus over the period of 2000-2012. In theory, directed lending can enhance physical capital accumulation and make the access to credit easier, but empirical studies often show that it leads to...