This paper studies the patterns and key determinants of staged economic development. We construct a two-sector dynamic general equilibrium model popu- lated with one-period lived non-overlapping generations, feasting ...This paper studies the patterns and key determinants of staged economic development. We construct a two-sector dynamic general equilibrium model popu- lated with one-period lived non-overlapping generations, feasting endogenous en- hancement in modern technology and endogenous accumulation of labor skills and capital funds. We consider preference biases toward the traditional sector of necessi- ties, capital barriers to the modern sector, and imperfect substitution between skilled and unskilled workers. By calibrating the model to fit historic U.S. development, we find that modern technologies, saving incentives and capital scales/barriers are the most important determinants of the takeoff time. By evaluating the process of eco- nomic development, we identify that what shapes saving incentives is most crucial for the speed of modernization after taking off. We further establish that labor, capital and output are most responsive to the initial state of modern technologies, but least responsive to skill endowments, along the dynamic transition path.展开更多
文摘This paper studies the patterns and key determinants of staged economic development. We construct a two-sector dynamic general equilibrium model popu- lated with one-period lived non-overlapping generations, feasting endogenous en- hancement in modern technology and endogenous accumulation of labor skills and capital funds. We consider preference biases toward the traditional sector of necessi- ties, capital barriers to the modern sector, and imperfect substitution between skilled and unskilled workers. By calibrating the model to fit historic U.S. development, we find that modern technologies, saving incentives and capital scales/barriers are the most important determinants of the takeoff time. By evaluating the process of eco- nomic development, we identify that what shapes saving incentives is most crucial for the speed of modernization after taking off. We further establish that labor, capital and output are most responsive to the initial state of modern technologies, but least responsive to skill endowments, along the dynamic transition path.
