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Threshold Externalities in Economic Development

Costas Azariadis^1,2; Allan Drazen^3,4

¹ California University of Pennsylvania · ² University of Pennsylvania · ³ Tel Aviv University · ⁴ Princeton University

Standard one-sector growth models often have the counterfactual implication that economies with access to similar technologies will converge to a common balanced growth path. We propose an elaboration of the Diamond model that permits multiple, locally stable stationary states. This multiplicity is due to increasing social returns to scale in the accumulation of human capital.

DOI

10.2307/2937797

Volume

105 (2)

Pages

501

Export

BibTeX

Sources

crossref openalex