This paper investigates the equilibrium dynamics of an economy where two production technologies are available: One is a primitive production technology which realizes constant returns to scale, and the other is an advanced technology, which exhibits increasing returns to scale due to...

In order to get good positions in companies, people try to enter highly-ranked universities. However, abilities vary greatly between individuals. High-ability individuals have an incentive to send signals to firms by obtaining a higher level of education in order to distinguish themselves from...