Asymmetric Growth and Institutions in an Interdependent World

Abstract : We present a model of technologically interconnected countries that benefit and potentially contribute to advances in the world technology frontier. Greater inequality between successful and unsuccessful entrepreneurs increases entrepreneurial effort and a country’s contribution to that frontier. Under plausible assumptions, the world equilibrium is asymmetric, involving different economic institutions and technology levels for different countries. Some countries become technology leaders and opt for a type of “cutthroat” capitalism with greater inequality and innovations, while others free ride on the cutthroat incentives of the leaders and choose a more “cuddly” form of capitalism with greater social insurance for entrepreneurs.
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Submitted on : Monday, October 9, 2017 - 9:04:53 PM
Last modification on : Tuesday, April 24, 2018 - 5:20:16 PM

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Daron Acemoglu, James A. Robinson, Thierry Verdier. Asymmetric Growth and Institutions in an Interdependent World. Journal of Political Economy, University of Chicago Press, 2017, 125 (5), pp.1245 - 1305. ⟨10.1086/693038⟩. ⟨hal-01613638⟩

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