Bethencourt, Carlos and Perera-Tallo, Fernando (2012): Declining Predation during Development: a Feedback Process.
Download (290kB) | Preview
Empirical evidence suggests that poorer countries have larger portions of predation. We formulate a neoclassical growth model in which agents devote time either to produce or predate. When the elasticity of substitution between labor and capital is lower than one, the labor share rises with capital, reducing the incentive to predate and increasing the incentive to produce throughout the transition. Consequently, a feedback process between capital accumulation and predation arises which ampli¯es income di®erences generated by di®erences in productivity. Thus, this paper helps understand why di®erences among countries have remained stable and the key role that institutions play in development.
|Item Type:||MPRA Paper|
|Original Title:||Declining Predation during Development: a Feedback Process|
|English Title:||Declining Predation during Development: a Feedback Process|
|Keywords:||Predation, Labor share, Development|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models
O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O43 - Institutions and Growth
|Depositing User:||Carlos Bethencourt|
|Date Deposited:||14 Oct 2012 15:16|
|Last Modified:||18 Sep 2016 15:22|