Template-Type: ReDIF-Paper 1.0
Title: Endogenous Technology Choice and the Big Push
Author-Name:Nico A. Hansen
Abstract: We present a general equilibrium model of imperfect  competition
  	to analyze Rosenstein-Rodan's idea of the 'Big Push'.  Simultaneous
  	investment of many sectors of the economy can be  profitable for
  	everyone although no sector can break even industrializing  alone.
  	The mechanism that generates such multiple macroeconomic equilibria
  	is a demand spillover that influences how factor saving the chosen
  	production technologies are. Contrary to the existing 'Big Push'
  	literature,  we show that pure profit spillovers can cause multiple
  	equilibria. Equilibria  with modern technologies are preferable to
  	others. Adoption of highly productive  technologies may be the only
  	way to get out of a 'bad' equilibrium. Technology  choice crucially
  	depends on the property rights on profits and is shown to be
  	extremely fragile with respect to policy.
Keywords: Big Push, industrialization, technology choice, development,
  	multiple  equilibria, property rights|
Classification-JEL: O14; O33; H32
Creation-Date: 1995-03-14
File-URL: http://www.wiwi.uni-bonn.de/bgsepapers/bonsfa/bonsfa473.ps
File-Format: Application/PostScript
File-Size: 14
Handle: RePEc:bon:bonsfa:473