Indeterminacy in an economic growth model arises whenever the stable manifold has dimension greater than the number of predetermined initial conditions. The stability (indeterminacy) of transition paths in the Benhabib and Farmer (1996) model of growth is investigated, using both the Lyapunov method and numerical simulation techniques. The sensitivity of transient dynamics is analyzed with resp...

This paper analyzes qualitatively and quantitatively the effects of declining mortality rates on fertility, education and economic growth. The analysis demonstrates that if individuals are prudent in the face of uncertainty about child survival, a decline in an exogenous mortality rate reduces precautionary demand for children and increases parental investment in each child. Once mortality is e...

The inefficiency of the Italian judicial system has contributed to reduced investments, slow growth, and a difficult business environment. The enforcement of civil and commercial claims suffers from excessive delays in court proceedings, resulting in a very large number of pending cases. The Italian authorities have, over the years, taken steps to remove bottlenecks and speed up judicial procee...

We analyze how the threat of a potential future regime shift affects optimal management. We use a simple general growth model to analyze four cases that involve combinations of stock collapse versus changes in system dynamics, and exogenous versus endogenous probabilities of regime shift. Prior work has focused on stock collapse with endogenous probabilities and reaches ambiguous conclusions ab...

Labour productivity distribution (dispersion) is studied both theoretically and empirically. Superstatistics is presented as a natural theoretical framework for productivity. The demand index κ is proposed within this framework as a new business index. Japanese productivity data covering small-to-medium to large firms from 1996 to 2006 is analyzed and the power-law for both firms and workers is...

Economic integration is examined in a multi-economy Schumpeterian growth model where economies differ in their research environment, and consequently in the productivity of R&D. We show that economies with more or less the same productivity of R&D integrate. In equilibrium, there can be many common markets with different growth rates as well as stagnating economies with decreasing relative inco...

In standard endogenous growth models, the higher the research e¤ort the higher is the innovation rate of the economy. Innovating, however, is a complex process that requires an entrepreneur to implement a valuable invention. Hence when research and entrepreneurial skills compete in the allocation of aggregate resources, the relation between growth and R&D is hump-shaped. This paper proposes a m...

Examining the correlation between trade and income cannot identify the direction of causation between the two. Countries’ geographic characteristics, however, have important effects on trade, and are plausibly uncorrelated with other determinants of income. This paper therefore constructs measures of the geographic component of countries’ trade, and uses those measures to obtain instrumental va...