A Gold Rush Theory of Economic Development
Author | : |
Publisher | : |
Total Pages | : |
Release | : 2006 |
ISBN-10 | : 0753019450 |
ISBN-13 | : 9780753019450 |
Rating | : 4/5 (50 Downloads) |
Download or read book A Gold Rush Theory of Economic Development written by and published by . This book was released on 2006 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper presents a model of social learning about the suitability of local conditions for new business ventures and explores its implications for the microeconomic patterns of economic development. I show that: i) firms tend to 'rush' into business ventures with which other firms have had surprising success thus causing development to be 'lumpy'; ii) sufficient business confidence is crucial for fostering economic growth; iii) development may involve wave-like patterns of growth where successive business ventures are first pursued and then given up; iv) there is, nevertheless, no guarantee that firms pursue the best venture even in the long-run.