We construct an endogenous growth model of directed technical change with automation (the introduction of machines which replace low-skill labor and complement high-skill labor) and horizontal innovation (the introduction of new products, which increases demand for both types of labor). For general processes of technical change, we demonstrate that although low-skill wages can drop during perio...

This paper reviews the Chilean experience of growth, with particular focus on the rapid growth that began in the mid-1980s, as the economy recovered from the crisis of 1982. This process slowed down in the late nineties. This paper also reviews the evidence on growth and decomposes the rate of growth and the level of output into its components. It discusses the strengths and weaknesses that exp...

Can we use neoclassical growth model to single out the important transmission channels through which primitives a¤ected the Indian economy and caused the remarkable growth of the period 1982 to 2002? In this paper, we answer the question by applying the new technique of business cycle accounting to the Indian economy. Business cycle accounting procedure is based on the idea that primitives a¤ec...

This paper argues that the internal organization of the ̄rm and the growth process interact strongly to determine simultaneously the power of incentives within the ̄rm and the growth rate of the economy. We show how agents within the ̄rm can invest either by using their own human capital or by relying on some form of reputational capital to secure implicit relationships within the ̄rm and we di...

The paper analyzes an economy with an agrarian and an industrial sector. Demand is determined by Engel's Law. Population growth follows a non{linear income dependent path according to the theory of demographic transition. In case of decreasing returns to scale in the agrarian sector the existence of a stable low{income equilibrium with high population growth can be shown. If this equilibrium is...

The "new economy" has become a buzzword to characterize the American economy, with positive connotations but imprecise meaning. Sometimes it is used to refer only to selected high technology sectors, specifically computers, semiconductors, software, and telecommunications. But usually the term implies significant changes in the US economy as a whole. At its most dramatic, the term suggested tha...

We examine the relationship between economic growth, tax policy, and the distribution of capital and labor ownership in a one-sector political-economy model of endogenous growth with productive government spending Þnanced by a proportional tax on capital income. Our analysis shows that inequality in wealth and income can be positively or negatively related to the optimal tax rate. In either env...

This paper considers the longer-term viability of the internationalization and success of Indian MNEs. We apply the ‘dual economy’ concept (Lewis 1954), to reconcile the contradictions of the typical emerging economy, where a ‘modern’ knowledge-intensive economy exists alongside a ‘traditional’ resource-intensive economy. Each type of economy generates firms with different types of ownership ad...

This paper measures the size and structure of the U.S. information economy in 1992 and compares them with Marc Porat’s measures for 1967[4]. It also examines the magnitude and growth of the information components of the service sector over the years. The results of this study highlight the importance of information in the U.S. economy. It also documents interesting facts about the growth and co...