Industrialized Growth In Developing Economies
Date:
— My econ PhD deference presentation:
This thesis provides a model ofgrowth and debt accumulation for developing countries aiming to overhaul their economies through industrialization. The core of the model is an infant R&D sector that allocates labor to generate knowledge and uses the knowledge to generate machinery used across the economy. This sector is initially subsidized and trade protected. Thesubsidy and protection will be relieved after the R&D sector reaches a self-sufficient production level where the cost of producing machinery is less than its marginal productivity in the other sectors. Based on this model, I try to answer several key questions: first, how much subsidy should be applied to the machinery prices tomaximize the output of the economy, and second what growth level is attainable in a such an economy.