TY - JOUR
T1 - Middle-income traps and complexity in economic development
AU - Asano, Takao
AU - Shibata, Akihisa
AU - Yokoo, Masanori
N1 - Funding Information:
Research funding: This research was financially supported by International Joint Research Center of Advanced Economic Research of KIER and the Grants-in-Aid for Scientific Research, JSPS (17K03806, 20H05631, 20K01745, 20H01507, and 21K01388).
Publisher Copyright:
© 2022 Walter de Gruyter GmbH, Berlin/Boston 2022.
PY - 2022
Y1 - 2022
N2 - In this paper, we develop a simple multi-technology overlapping generations model that exhibits a wide variety of economic development patterns. In particular, our numerical simulations demonstrate that for a given set of parameter values, various types of development patterns such as the middle-income trap, the poverty trap, periodic or chaotic fluctuations, and high-income paths can coexist, and which pattern is realized depends only on the initial value of capital. For another set of parameter values, we show that, due to the pinball effect, an economy starting at a middle-income level can take off to the high-income state or get caught in the poverty trap in a seemingly random way after undergoing transient chaotic motions. Our results can explain observed complicated patterns of economic development in a unified manner.
AB - In this paper, we develop a simple multi-technology overlapping generations model that exhibits a wide variety of economic development patterns. In particular, our numerical simulations demonstrate that for a given set of parameter values, various types of development patterns such as the middle-income trap, the poverty trap, periodic or chaotic fluctuations, and high-income paths can coexist, and which pattern is realized depends only on the initial value of capital. For another set of parameter values, we show that, due to the pinball effect, an economy starting at a middle-income level can take off to the high-income state or get caught in the poverty trap in a seemingly random way after undergoing transient chaotic motions. Our results can explain observed complicated patterns of economic development in a unified manner.
KW - CES production function
KW - chaos
KW - complex dynamics
KW - middle-income traps
KW - nonlinearities
KW - technology choice
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U2 - 10.1515/snde-2021-0100
DO - 10.1515/snde-2021-0100
M3 - Article
AN - SCOPUS:85137684175
SN - 1081-1826
JO - Studies in Nonlinear Dynamics and Econometrics
JF - Studies in Nonlinear Dynamics and Econometrics
ER -
