Multiple goods and growth

Recent analyses often use one-good models to explain why the least developed countries have little income growth. While a one-good model permits only supply side considerations, a multiple-goods framework enables analysing income growth differences from both the supply and the demand sides. Introducing asymmetry in preference and technology in a two-goods model proves to be promising in simultaneously explaining the unfavourable income growth rates for some LDCs and high growth rates for industrializing countries.