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The Road Not Taken: What Is The “Appropriate” Path To Development When Growth Is Unbalanced?

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  • Rahman, Ahmed S.

Abstract

This paper develops a model that endogenizes both directed technologies and demography. Potential innovators decide which technologies to develop after considering available factors of production, and individuals decide the quality and quantity of their children after considering available technologies. This interaction allows us to evaluate potentially divergent development paths. We find that unskilled labor–biased technological growth can induce higher fertility and lower education, exerting downward pressure on growth in per-person income. Despite this, for most plausible developing-country scenarios, unskilled intensive growth produces more per-person income than skill-intensive growth. This result is robust to a variety of growth modeling assumptions.

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  • Rahman, Ahmed S., 2013. "The Road Not Taken: What Is The “Appropriate” Path To Development When Growth Is Unbalanced?," Macroeconomic Dynamics, Cambridge University Press, vol. 17(4), pages 747-778, June.
    • Handle: RePEc:cup:macdyn:v:17:y:2013:i:04:p:747-778_00
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    Cited by:

    1. Kevin H. O’Rourke & Ahmed S. Rahman & Alan M. Taylor, 2012. "Trade, Technology and the Great Divergence," Departmental Working Papers 35, United States Naval Academy Department of Economics.
    2. Yuki, Kazuhiro, 2016. "Education, Inequality, And Development In A Dual Economy," Macroeconomic Dynamics, Cambridge University Press, vol. 20(1), pages 27-69, January.
    3. Ojha, Vijay P. & Pradhan, Basanta K. & Ghosh, Joydeep, 2013. "Growth, inequality and innovation: A CGE analysis of India," Journal of Policy Modeling, Elsevier, vol. 35(6), pages 909-927.
    4. Ahmed S. Rahman, 2017. "Rise of the Machines Redux – Education, Technological Transition and Long-run Growth," Departmental Working Papers 61, United States Naval Academy Department of Economics.

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