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.
