Growing at the production frontier. European aggregate growth, 1870-1914

The view of a 1870-1913 expanding European economy providing increasing welfare to everybody has been challenged by many, then and now. We focus on the amazing growth that was experienced, its diffusion and its sources, in the context of the permanent competition among European nation states. During 1870-193 the globalized European economy reached a “silver age”. GDP growth was quite rapid (2.15% per annum) and diffused all over Europe. Even discounting the high rates of population growth (1.06%), per capita growth was left at a respectable 1.08%. Income per capita was rising in every country, and the rates of improvement were quite similar. This was a major achievement after two generations of highly localized growth, both geographically and socially. Growth was based on the increased use of labour and capital, but a good part of growth (73 per cent for the weighted average of the best documented European countries) came out of total factor productivity –efficiency gains resulting from not well specified ultimate sources of growth. This proportion suggests that the European economy was growing at full capacity –at its production frontier. It would have been very difficult to improve its performance. Within Europe, convergence was limited, and it only was in motion after 1900. What happened was more the end of the era of big divergence rather than an era of convergence.Economic history, aggregate growth, total factor productivity, comparative national patterns, Europe

Correspondence: Are Cognitive Functions Localizable? Colin Camerer et al. versus Marieke van Rooij and John G. Holden

The Fall 2011 issue of this journal published a two-paper section on “Neuroeconomics.” One paper, by Ernst Fehr and Antonio Rangel, clearly and concisely summarized a small part of the fast-growing literature. The second paper, “It’s about Space, It’s about Time, Neuroeconomics, and the Brain Sublime,” by Marieke van Rooij and Guy Van Orden, is beautifully written and enjoyable to read, but misleading in many critical ways. A number of economists and neuroscientists working at the intersection of the two fields shared our reaction and have signed this letter, as shown below. Some of the paper’s descriptions of empirical findings and methods in neuroeconomics are incomplete, badly out of date, or flatly wrong. In studies the authors describe in detail, their skeptical interpretations have often been refuted by published data, old and new, that they overlook

Developing Consensus-Based Priority Outcome Domains for Trials in Kidney Transplantation:A Multinational Delphi Survey With Patients, Caregivers, and Health Professionals

Background: Inconsistencies in outcome reporting and frequent omission of patient-centered outcomes can diminish the value of trials in treatment decision-making. We identified critically important outcome domains in kidney transplantation based on the shared priorities of patients/caregivers and health professionals. Methods: In a 3-round Delphi survey, patients/caregivers and health professionals rated the importance of outcome domains for trials in kidney transplantation on a 9-point Likert scale and provided comments. During Round 2 and 3, participants re-rated the outcomes after reviewing their own score, the distribution of the respondents’ scores, and comments. We calculated the median, mean, and proportion rating 7-9 (critically important), and analyzed comments thematically. Results: 1018 participants (461 [45%] patients/caregivers and 557 [55%] health professionals) from 79 countries completed Round 1, and 779 (77%) completed Round 3. The top eight outcomes that met the consensus criteria in Round 3 (mean ≥7.5, median ≥8 and proportion >85%) in both groups were graft loss, graft function, chronic rejection, acute rejection, mortality, infection, cancer (excluding skin) and cardiovascular disease. Compared with health professionals, patients/caregivers gave higher priority to six outcomes (mean difference of 0.5 or more): skin cancer, surgical complications, cognition, blood pressure, depression, and ability to work. We identified five themes: capacity to control and inevitability, personal relevance, debilitating repercussions, gaining awareness of risks, and addressing knowledge gaps. Conclusions: Graft complications and severe comorbidities were critically important for both stakeholder groups. These stakeholder-prioritized outcomes will inform the core outcome set to improve the consistency and relevance of trials in kidney transplantation

Growth and Business Cycles -Swedish Manufacturing Industry 1952-2001

This study shows that the mechanisms behind knowledge accumulation and the sources of productivity growth differ from industry to industry depending on what is produced and what technology is used. Although it is apparent to most researchers in the field that the only way to explain long-run growth in output per capita is through technological progress and accumulation of knowledge that counteract the dampening effect of diminishing returns, we are still in the dark about how such mechanisms operate. By focusing on the importance of separating industrial sectors with different methods of production and thereby including the possibility of TFP reflecting various growth mechanisms for diverse industries, this thesis tries to rethink the history of productivity growth in the Swedish manufacturing industry. A unique dataset, for the period 1952 to 2001, makes it possible to distinguish labour-intensive, capital-intensive and knowledge-intensive industries. Analysing the cointegration VAR model means that the sources of long-run productivity growth and business cycles are treated as separate yet interdependent issues. We show that, by applying relevant economic theory to representative data and using advanced econometric methods, it is feasible to test a variety of theoretical assumptions about endogenous growth on appropriate data. In so doing, we establish the important role of opportunity costs in allocating investments among various ways of accumulating knowledge. Since resources are scarce, investment in one form of knowledge accumulation takes place at the expense of another, which in turn has important implications for business cycles. We obtained the following results: the highest rate of knowledge accumulation was attained in industries using technologically advanced production processes and/or manufacturing technologically advanced goods. Business cycles reflect the sum of simultaneous productivity increases and productivity losses as altering opportunity costs allocated investments among knowledge-accumulating and/or growth-generating mechanisms. The productivity slowdown in 1975 was not as severe in all sectors; nor was the catch-up in the 1990s as strong in all industries. The concept of past-dependent knowledge accumulation giving rise to locked-in expertise, and rapidly falling rates of learning on aged techniques and old products, is put forward as the main explanations for why the severest productivity slowdown and failure to adjust to new economic conditions took place in capital-intensive industry. Rapidly increasing knowledge accumulation and monopoly profits explains why the '1975-crisis' hit knowledge- intensive industry the least, and why this industry showed the greatest catch-up between 1992 and 2001

Growing at the production frontier. European aggregate growth, 1870-1914

The view of a 1870-1913 expanding European economy providing increasing welfare to everybody has been challenged by many, then and now. We focus on the amazing growth that was experienced, its diffusion and its sources, in the context of the permanent competition among European nation states. During 1870-193 the globalized European economy reached a �silver age�. GDP growth was quite rapid (2.15% per annum) and diffused all over Europe. Even discounting the high rates of population growth (1.06%), per capita growth was left at a respectable 1.08%. Income per capita was rising in every country, and the rates of improvement were quite similar. This was a major achievement after two generations of highly localized growth, both geographically and socially. Growth was based on the increased use of labour and capital, but a good part of growth (73 per cent for the weighted average of the best documented European countries) came out of total factor productivity �efficiency gains resulting from not well specified ultimate sources of growth. This proportion suggests that the European economy was growing at full capacity �at its production frontier. It would have been very difficult to improve its performance. Within Europe, convergence was limited, and it only was in motion after 1900. What happened was more the end of the era of big divergence rather than an era of convergence

How does dishonesty affect winning and the willingness to compete? : evidence from a stiff competition environment

We experimentally investigate how the possibility of behaving dishonestly affects the willingness to compete and who the winner is when there is stiff competition. Our results show that although only some subjects are dishonest when competing, dishonest behaviour creates significant inefficiencies due to best performing subjects not winning. Willingness to compete, on the other hand, was unaffected