On growth and indeterminacy

some theory and evidence

Jess Benhabib, Jordi Gali

    Research output: Contribution to journalArticle

    Abstract

    We overview some recent models of growth with multiple equilibria. Those models offer a potential explanation for differences in income levels across economies which stands as an alternative to theories that rely exclusively on differences in fundamentals and/or initial conditions. We discuss some of the empirical predictions generated by those models vis à vis the predictions of their deterministic counterparts. Using an approach that makes use of physical and human capital data for a cross-section of countries we show that some of the predictions of growth models with unique equilibria are hard to reconcile with the evidence.

    Original languageEnglish (US)
    Pages (from-to)163-211
    Number of pages49
    JournalCarnegie-Rochester Confer. Series on Public Policy
    Volume43
    Issue numberC
    DOIs
    StatePublished - 1995

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    Prediction
    Indeterminacy
    Physical capital
    Income level
    Initial conditions
    Cross section
    Human capital
    Multiple equilibria
    Growth model

    Cite this

    On growth and indeterminacy : some theory and evidence. / Benhabib, Jess; Gali, Jordi.

    In: Carnegie-Rochester Confer. Series on Public Policy, Vol. 43, No. C, 1995, p. 163-211.

    Research output: Contribution to journalArticle

    Benhabib, Jess ; Gali, Jordi. / On growth and indeterminacy : some theory and evidence. In: Carnegie-Rochester Confer. Series on Public Policy. 1995 ; Vol. 43, No. C. pp. 163-211.
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