• Share
  • Print
    • Text Size
    • Smaller
    • Larger
WP image
On This Page
WP 1998-03
Last Updated: 05/04/1998

Could Prometheus Be Bound Again?: A Contribution to the Convergence Controversy

Nicola Cetorelli

This paper presents a model of stochastic growth in which the probability of adverse shocks to production is inversely related to the aggregate stock of capital per capita. Postulating this endogenous relationship, justi ed by empirical evidence, the model yields long-run predictions consistent with the recent ndings of cross-country club convergence and intra-distribution mobility.