Institutions and prosperity

Patience and prosperity

This paper introduces wealth-dependent time preference into a simple model of endogenous growth. The model generates adjustment dynamics in line with the historical facts on savings and economic growth in Europe from the High Middle Ages to today. Along a virtuous cycle of development more wealth leads to more patience, which leads to more savings and even higher wealth. Savings rates and incom...

Preschool and Prosperity

Substantial research shows that high-quality early childhood education programs have a large economic payoff. This payoff is increased earnings for former child participants, increased earnings for parents, and increased earnings for all workers when average worker skills improve. A program package of universal pre-K, combined with child care and parenting support for all low-income families, w...

Prosperity and Environmental Quality

Religious Freedom and Economic Prosperity

The basic notion that an individual’s freedom to choose will advance society at large is a cornerstone of political philosophy and of the economic theory of the Western world. Early political philosophers such as John Stuart Mill and legendary economists such as Adam Smith have advocated a utilitarian approach to political and economic life, in which the advancement of one’s own interests also ...

Relative Prices and Relative Prosperity

The positive correlation between real (PPP) investment rates and levels of PPP income across countries is one of the most robust findings of the empirical growth literature. We show that this relationship is almost entirely driven by differences in the price of investment relative to output, rather than by differences in nominal investment rates. When measured in nominal terms (i.e., at nationa...