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Technology Choice, Externalities in Production, and Chaotic Middle-Income Traps

Takao Asano (), Akihisa Shibata and Masanori Yokoo ()
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Takao Asano: Okayama University
Masanori Yokoo: Okayama University

No 1075, KIER Working Papers from Kyoto University, Institute of Economic Research

Abstract: We incorporate external effects of capital on production and endogenous technology choice into the standard overlapping generations model. We demonstrate that our model can exhibit poverty traps, middle-income traps, and perpetual growth paths. We also show that these three phenomena coexist for some set of parameters and the economy caught in the middle-income trap can exhibit chaotic fluctuations in the long run. In obtaining these results in the standard overlapping generations model, the combination of technology choice and externalities in production plays a crucial role.

Keywords: External effect; Technology choice; Overlapping generations model, Middle-income trap; Chaos (search for similar items in EconPapers)
Pages: 37 pages
Date: 2022-03
New Economics Papers: this item is included in nep-dcm, nep-dge and nep-gro
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Related works:
Journal Article: Technology choice, externalities in production, and a chaotic middle-income trap (2024) Downloads
Working Paper: Technology Choice, Externalities in Production, and a Chaotic Middle-Income Trap (2023) Downloads
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