Heterogeneity and change in the process of economic development

Viac o knihe

This book offers a comprehensive analysis of how heterogeneous economic agents interact with the overall economy, particularly concerning economic growth and development. The diversity among individuals serves as a crucial element in market economies, driving phenomena that are often challenging to explain. By considering heterogeneous agents, the book examines not only the broader economic impact of individual decisions but also the specific behaviors of single agents. It highlights the significance of heterogeneity in economic analysis, applying it to the evolution of firms and the international movement of labor. The first part focuses on firm evolution, particularly regarding the product life cycle and firm size composition, emphasizing how firm activities drive economic growth, which in turn influences firm evolution. Two models of endogenous growth illustrate the dynamics of Schumpeterian creative destruction, where new products displace existing ones, leading to a coexistence period before the least efficient products exit the market. These models demonstrate how knowledge diffusion transforms firm-specific knowledge into general economic knowledge, fostering growth while also causing product obsolescence. The second part analyzes the effects of changes in migration regimes for skilled labor on individuals with varying educational backgrounds, impacting the educational composition and production structure of the sending