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Federal Reserve Bank of Chicago
Working Paper Series
Could Prometheus be bound again? a contribution to the convergence controversy
Nicola Cetorelli
Abstract

This paper presents a model of stochastic growth in which the probability of adverse shocks to production is inversely related to the aggregate stock of capital per capita. Postulating this endogenous relationship, justified by empirical evidence, the model yields long-run predictions consistent with the recent findings of cross-country club convergence and intra-distribution mobility.


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Nicola Cetorelli, Could Prometheus be bound again? a contribution to the convergence controversy, Federal Reserve Bank of Chicago, Working Paper Series WP-98-3, 1998.
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Keywords: Capital ; Econometric models
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