This paper analyzes saving and capital accumulation in a two-good growth model of two market economies in which economic agents optimize with perfect foresight. The goal is to present a model in which short-run dynamics and the steady-state are soundly integrated. We stress the importance of...

This paper analyzes saving and capital accumulation in a two-good growth model of two market economies in which economic agents optimize with perfect foresight. The goal is to present a model in which short-run dynamics and the steady-state are soundly integrated. We stress the importance of...

This paper explores how poor countries might take advantage of globalization to raise their living standards and converge toward the advanced economies. The poor country, which has cheap labor and inadequate capital, acquires the superior technology that the rich country has. With everyone...