... kinds of capital are growing at constant percentage rates, the prices of the two kinds of Journal of Monetary Economics22(1988) 3-42. North-Holland ON THE MECHANICS OF ECONOMIC DEVELOPMENT* RobertE.LUCAS, ... are surely the exceptions, not the rule. (These are the 'tradeconsiderations' I mentioned earlier.)This simple model shares with the model of section 4 the prediction of constant, endogenously ... 0) itisconvex. The position of R.E.Lucas, Jr., On the mechanics of economic development25 the curve depends on u andK,which from (20) and (21) can be expressedasfunctions of P. Using...