1. Economic growth in a politically fragmented world
- Author
-
Byeongju Jeong
- Subjects
Economic integration ,Economics and Econometrics ,business.industry ,media_common.quotation_subject ,Distribution (economics) ,Human capital ,Politics ,Market economy ,Economics ,Position (finance) ,Economic system ,business ,Productivity ,Coordination failure ,Diversity (politics) ,media_common - Abstract
I explore the effects of economic and political integration on economic growth in a model of vintage human capital and sequential intergenerational bargains. Adoption of a new technology raises not only the productivity but also the bargaining position of the future generations, creating a bias for the current generations to preserve the current technology. Economic integration (i.e., the sharing of frontier technology among countries) promotes growth if there is a diversity in human capital distribution or a coordination failure across countries. On the other hand, political integration (i.e., the merging of countries into a single bargain) promotes stagnation as it eliminates the diversity and coordination failures.
- Published
- 2014
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