Nonhomothetic preferences, growth, trade and land

E. Echevarria

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: Nonhomothetic preferences with minimums of subsistence imply rates of investment that increasewith the level of income, and thus a positive correlation between growth rates and the level ofincome, at low levels of income. The existence of this positive correlation for a closed economywas already shown in a previous paper. The purpose of this paper is to show that, if we introduceland -a scarce resource that cannot be accumulated- in the model, this positive correlation existsfor an open economy as well.

Keywords: Subsistence minimums; investment rates (search for similar items in EconPapers)
Pages: 2 pages
Date: 1997-04
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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:1997-14

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