Nonergodic Economic Growth

Steven Durlauf

The Review of Economic Studies, 1993, vol. 60, issue 2, 349-366

Abstract: This paper explores the role of complementarities and incomplete markets in economic growth. We analyze the evolution of an economy composed of a countable set of industries. Individual industries exhibit non-convexities in production and are linked by localized technological complementarities. These complementarities, when strong enough, produce multiple equilibria in long-run economic activity. The equilibria have a simple probabilistic structure that demonstrates how local interactions can affect the aggregate equilibrium. The model generates interesting cross-sectional and intertemporal dynamics as coordination problems become the source of aggregate and individual industry volatility. The model also illustrates how the growth of leading sectors can cause a takeoff to a high aggregate production equilibrium.

Date: 1993
References: Add references at CitEc
Citations: View citations in EconPapers (232)

Downloads: (external link)
http://hdl.handle.net/10.2307/2298061 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Nonergodic Economic Growth (1991)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:60:y:1993:i:2:p:349-366.

Access Statistics for this article

The Review of Economic Studies is currently edited by Thomas Chaney, Xavier d’Haultfoeuille, Andrea Galeotti, Bård Harstad, Nir Jaimovich, Katrine Loken, Elias Papaioannou, Vincent Sterk and Noam Yuchtman

More articles in The Review of Economic Studies from Review of Economic Studies Ltd
Bibliographic data for series maintained by Oxford University Press ().