Browse

You are looking at 1 - 1 of 1 items for :

  • Innovation; Research and Development; Technological Change; Intellectual Property Rights: General x
  • Macroeconomics and Monetary Economics: General x
Clear All
Luis Carranza and Mr. José Enrique Galdón-Sánchez
Per capita output is more volatile in middle-income economies than in both low-income and high-income economies. We examine this pattern in a two-period overlapping generations model with two productive sectors (a developed sector and a subsistence sector) and a credit sector. In the early and mature stages of development, there is a unique equilibrium, because labor and credit markets are cleared by a unique set of prices. In the middle stages of development, however, the model shows that markets can be cleared by a multiple set of prices. This multiplicity of equilibria arises as productive externalities are reflected in credit markets.