Producers, parasites and poverty traps

Marcelo de Carvalho Griebeler and Ronald Otto Hillbrecht
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Ronald Otto Hillbrecht: Universidade Federal do Rio Grande do Sul, Faculdade de Ciências EconômicasAuthor-

Economia, 2015, vol. 16, issue 3, 310_320

Abstract: We studied the population dynamics of producers and parasites in a developing economy through the Lotka–Volterra model. Our baseline model found a cyclical equilibrium between these two groups of agents. When the equilibrium output is low, we propose that economy is in a poverty trap, such that the only way to achieve superior equilibrium is through improvements in the institutional parameters (e.g. property rights). By adding expectations and time delays, the cyclical result may no longer hold. Nevertheless, institutional improvements promote development through an increase in the level of producers and a decrease of parasites. Still, such improvements positively affect the stability of the modified model

Keywords: Lotka–Volterra model; Institutions; Economic development; Parasites (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
Date: 2015
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