Abstract
We overview some recent models of growth with multiple equilibria. Those models offer a potential explanation for differences in income levels across economies which stands as an alternative to theories that rely exclusively on differences in fundamentals and/or initial conditions. We discuss some of the empirical predictions generated by those models vis à vis the predictions of their deterministic counterparts. Using an approach that makes use of physical and human capital data for a cross-section of countries we show that some of the predictions of growth models with unique equilibria are hard to reconcile with the evidence.
Original language | English (US) |
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Pages (from-to) | 163-211 |
Number of pages | 49 |
Journal | Carnegie-Rochester Confer. Series on Public Policy |
Volume | 43 |
Issue number | C |
DOIs | |
State | Published - Dec 1995 |