The current economic crisis has long-term causes that are rooted in the economic dynamics of globalization. I construct a Solow-style endogenous model of capital accumulation, technological change, trade and cheap-factor-seeking foreign direct investment (FDI), based on myopic agents. Combining...

I show that the evolution of cross-country incomes is characterized by global divergence. To do this, the sample of non-mainly-petroleum-exporting countries having market economies during the period 1960-1997 is divided into five clusters of countries by a regression clustering algorithm...

I construct a two-country multisectoral model of capital accumulation, endogenous technological change, trade, and foreign direct investment, whose steady states explain the main features of globalization: (a) increased economic participation of transnational corporation (TNC) profits, (b)...

A Schumpeterian theory of development and underdevelopment in an open global economy with technology transfer, trade and investment is presented. Free trade provides a powerful force for convergence. However, foreign direct investment (FDI), which consolidated during the 19th Century and has...