Perturbation of Equilibria and Stabilization Policies: the Further Phase

Abstract

The economic relevance of the equilibrium points found in theorem 15 is not to be overestimated. Even if the economy of the developed country is in equilibrium before the beginning of the industrialization process in the backward one thanks to the implementation of some stabilization policies as those discussed in chapters 11 and 12, it is clear that this equilibrium will survive if and only if the technical ad economic parameters b _e , w _e , l _e , d _e , ς, and the relative size z _e of the modern sector in the small country satisfy conditions (15.23) and (15.24) at the very beginning of the early phase, where ū, ̄s, ̄p, ̄z are the values characterizing the preexisting equilibrium (5.1).