Transitional Dynamics and Economic Growth in Developing Countries

Four stylised facts of aggregate economic growth are set up initially. The growth process is interpreted to represent transitional dynamics rather than balanced—growth equilibria. Against this background, the fundamental importance of subsistence consumption is comprehensively analysed. Subsequently, the meaning of the productive—consumption hypothesis for the intertemporal consumption trade—off and the growth process is investigated. Finally, the process of growth is analysed empirically b...