ECON 6280 Study Guide - Midterm Guide: Conditional Convergence, Raw Image Format, Diminishing Returns
Document Summary
Mankiw, romer and weil (mrw) 1992 rich countries accumulate both physical and human capital, which leads to more growth than before -> diminishing returns to physical capital as. Technological frontier investing in research and design to produce new products: diffusion of technology and tech advancement is slower in poor countries. Underdevelopment trap economic divergence and increasing returns. Middle-income trap countries developed to a degree, but fail to reach high-income status (e. g. brazil, russia, china) Multiple equilibria more than 2 equilibria of low/poor and high/rich . Spatial poverty traps geographically remote, less favored politically/limited market -> 2 possible solutions: place-central (help develop mississippi) or human-central (give subsist to relocate) Actions must be coordinated across many agents an difficult to organize actions of all agents; corruption. Kremer"s o-ring theory need to focus on production with strong complementarities among inputs -> push with multiple aspects of development.
