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Working Paper, No. 1998-03, 1998
Could Prometheus Be Bound Again?: A Contribution to the Convergence Controversy
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.


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