Flying or Trapped?

Yunfang Hu, Kazuo Nishimura, Ping Wang and Takuma Kunieda
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Takuma Kunieda: Kwansei Gakuin University

No 362, 2019 Meeting Papers from Society for Economic Dynamics

Abstract: We develop a unified theory under which not only a poverty trap but a middle income trap may also exist. In an otherwise standard growth model, we consider endogenous technology choice in human/knowledge capital accumulation, which enables us to establish a rich array of equilibrium development paradigms, including poverty trap, middle income trap and flying geese growth. We then generalize the baseline structure and establish conditions for different development paradigms to arise. By calibrating the general model to fit the data from several representative economies with different income and growth patterns, we identify various prolonged flying geese episodes and middle income traps. Our results suggest that improving human capital accumulation efficacy is most important, mitigating barriers to human capital accumulation is overall more rewarding than advancing total factor productivity.

Date: 2019
New Economics Papers: this item is included in nep-gro
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Related works:
Journal Article: Flying or trapped? (2023)
Working Paper: Flying or Trapped? (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed019:362

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