Asymmetric Growth and Institutions in an Interdependent World
Journal article: We present a model of technologically interconnected countries that benefit and potentially contribute to advances in the world technology frontier. Greater inequality between successful and unsuccessful entrepreneurs increases entrepreneurial effort and a country’s contribution to that frontier. Under plausible assumptions, the world equilibrium is asymmetric, involving different economic institutions and technology levels for different countries. Some countries become technology leaders and opt for a type of “cutthroat” capitalism with greater inequality and innovations, while others free ride on the cutthroat incentives of the leaders and choose a more “cuddly” form of capitalism with greater social insurance for entrepreneurs.
Author(s)
Daron Acemoglu, James A. Robinson, Thierry Verdier
Journal
- Journal of Political Economy
Date of publication
- 2017
Pages
- 1245 – 1305
URL of the HAL notice
Version
- 1
Volume
- 125