Taste for variety: Model of Grossman and Helpman.

Variety expansionEquilibriumExpenditures growth rateThe evolution of the world economy may be described by the pairof equations:◮ The first relates rate of growth of expenditures per middleproduct to the growth rate:ėeβe= Ė/E − g =ασ + 1 − β se − H − ρ; (37)α◮ This rate is greater, the greater is spending per product;◮ It is smaller, the greater is the share of products beingproduced in the county with comparative disadvantage;