Micro-macro interactions, growth and income distribution revisited

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Micro-macro interactions, growth and income distribution revisited


The international economy is marked by major asymmetries in technological capabilities and power, both at the domestic and international levels —a point emphasized by the structuralist tradition. These asymmetries strongly affect economic outcomes and place major constraints on economic policy. This working paper discusses how the microeconomics of learning interacts with structural change and the evolution of aggregate demand to generate either virtuous paths of economic development or vicious circles of underdevelopment and lagging behind. Some implications of these growth paths for the international and domestic political economy are discussed.


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Abstract .-- Introduction .-- I. Rationality and institutions in an uncertain world .-- II. Learning and the co-evolution of capabilities and the production structure .-- III. Structural Inertia, Lock-in and Institutions .-- IV. Institutions and power: Schumpeterian political economy .-- V. Combining the supply side and the demand side: a graphic interpretation .-- VI. Concluding remarks.