Economic underdevelopment: The case of a missing market for human capital

摘要: Abstract This paper demonstrates that the coexistence of developed and underdeveloped countries can be a stationary equilibrium in world economy with free trade consumption goods physical capital. An country is characterized by high ratio unskilled workers labor force, small stock capital, low gross national product, rate return on human capital corresponding large wage differential between skilled workers. The critical assumptions are future earnings cannot serve as collateral loan indivisibilities education.