This working paper presents a model of economic growth and development with two steady states - a low, stagnant state and a high, growing state. The model introduces learning, which provides a transition between the steady states. When starting with initially low human capital levels, as in preindustrial economies, the model shows the system spends a long period of time, or "epoch", near the low steady state before transitioning to the high steady state. This matches the historical evidence that today's richest countries experienced long stagnant growth periods before industrializing.
This working paper presents a model of economic growth and development with two steady states - a low, stagnant state and a high, growing state. The model introduces learning, which provides…