In this paper we present a model of optimizing behavior in a two-sector, centrally planned, economy that faces a given interest rate and that is capable of generating sustainable growth. By allowing the model economy to benefit from innovations at the technology frontier through a simple process...

In this paper I simplify the modeling of transitional dynamics and empirically explain why so many developing economies have seen their per capita income diverge from that of most OECD economies. I also provide evidence that strongly supports conditional convergence among the sample considered...