Stages of Diversification in a Neoclassical World Recent research has documented a U-shaped industrial concentration curve over an economy’s development path. How far can neoclassical trade theory take us in explaining this pattern? We estimate the production side of the Heckscher-Ohlin model using industry data on 44 developed and developing countries for the period 1976-2000. Decomposing the ...

Trustworthiness is the foundation for trust, institutions, and per capita output in society. Trustworthiness is primary – a society’s willingness to trust and the quality of its institutions have their origins in the trustworthiness of its citizens. Trustworthiness is therefore the basis for maximizing output in economic exchange and in explaining differences in standards of living around the w...

We ask which economic policies can help a country create the most favourable conditions for development. We observe that the dynamics of several development indicators can be grouped into four clusters, each cluster corresponding to a different combination of growth and changes in inequality. Based on this observation, we define four different development scenarios and use limited dependent var...

The theory of economic growth takes little notice of what is happening on the demand side of the markets so that ever more goods and services can be sold. In order to make progress, this paper revives a classical notion in economics, the concept of wants, and re-casts it in terms of a behavioral theory. Hypotheses are discussed concerning the wants people pursue, the changes in these wants, and...

This paper looks at the convergence clubs literature from a Schumpeterian perspective, and it follows the idea that cross-country differences in the ability to innovate and to imitate foreign technologies determine the existence of clustering, polarization and convergence clubs. The study investigates the characteristics of different technology clubs and the growth trajectories that they have f...

This paper contributes to the literature by empirically examining whether the influence of public debt on economic growth differs between the short and the long run and presents different patterns across euro-area countries. To this end, we use annual data from both central and peripheral countries of the European Economic and Monetary Union (EMU) for the 1960-2012 period and estimate a growth ...

The U.S. population has been migrating to places with high perceived quality of life. With homothetic preferences, such migration can follow from the increased demand for amenities that accompanies broad-based technological progress. Under the baseline calibration of a general equilibrium model, a place with amenities for which individuals would initially pay five percent of their income grows ...

Growth, Development, and Technological Change The theory of endogenous technical change has deeply contributed to our understanding of the fundamental sources of economic growth and development. In this chapter we survey important contributions in the field by focussing on the basic structure of endogenous growth models with horizontal as well as vertical innovation and emphasizing important im...

This paper examines the evidence for regional convergence or catch-up in levels and growth rates of per capita income among the 16 major states in India between 1960 and 1992. The results — estimated using OLS, the within-group LSDV estimator, Re-Weighted Least Squares, and Least Trimmed Squares — establish that unconditional convergence in growth rates does not obtain, but that there is clear ...

This paper evaluates (1) whether the exogenous component of "nancial intermediary development in#uences economic growth and (2) whether cross-country di!erences in legal and accounting systems (e.g., creditor rights, contract enforcement, and accounting standards) explain di!erences in the level of "nancial development. Using both traditional cross-section, instrumental variable procedures and ...