Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/31271 
Year of Publication: 
2005
Series/Report no.: 
Working Paper No. 2005-10
Publisher: 
Rutgers University, Department of Economics, New Brunswick, NJ
Abstract: 
Barriers to investment are often regarded as an important determinant of the variation in international income levels. Nevertheless, in the standard neoclassical growth model, these barriers have only have small effects on per capita incomes. We consider the effects of barriers to accumulation in a two-sector neoclassical model that also exhibits barriers to labor mobility. Numerical simulation show that barriers to accumulation have a magnified effect in this model. The results imply that if labor markets are not efficient, then barriers to accumulation may be an important determinant of a country's income level. Moreover, we show that the removal of these barriers can produce several decades of rapid growth, reminiscent of economic growth miracles.
Subjects: 
Economic Growth
Economic Development
Dual Economy
Barriers
Fragmented Labor Markets
Total Factor Productivity
JEL: 
O
O4
O41
Document Type: 
Working Paper

Files in This Item:
File
Size
198.13 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.