A number of models of increasing returns and path dependence in international trade and development involve the idea of aggregate demand spillovers (e.g. Shleifer & Vishny 1988) or externalities (e.g. Blanchard & Kiyotaki 1987). Murphy, Shleifer, & Vishny (1989), for example, take the Shleifer-Vishny model and conclude that “big push . . .
Exhibit 1: In order to stop funds from going to African “murderous militias”, Congress passed a law requiring U.S. companies to make sure they don’t buy minerals from mines controlled by them. Instead of choking their funds, the law so impoverished the miners that they have no choice but to . . .