Human Capital And Growth: Theory and Evidence

This paper outlines a theoretical framework for thinking about the role of human capital in a model of endogenous growth. The framework pays particular attention to two questions: What are the theoretical differences between intangibles like education and experience on the one hand, and knowledge or science on the other? and How do knowledge and science actually affect production? One implication derived from this framework is that the initial level of a variable like literacy may be important for understanding subsequent growth. This emphasis on the level of an input contrasts with the usual emphasis from growth accounting on rates of change of inputs. The principal empirical finding is that literacy has no additional explanatory power in a cross-country regression of growth rates on investment and other variables, but consistent with the model, the initial level of literacy does help predict the subsequent rate of investment, and indirectly, the rate of growth.

Why, indeed, in America? Theory, History, and the Origins of Modern Economic Growth

When they are used together, economic history and new growth theory give a more complete picture of technological change than either can give on its own. An empirical strategy for studying growth that does not use historical evidence is likely to degenerate into sterile model testing exercises. Historical analysis that uses the wrong kind of theory or no theory may not emphasize the lessons about technology that generalize. The complementarity between these fields is illustrated by an analysis of early industrialization. The key theoretical observation is that larger markets and larger stocks of resources create substantially bigger incentives for discovering new ways to use the resources. This simple insight helps explain why the techniques of mass production emerged in the United States during the first half of the 19th century. It also helps explain how a narrow advantage in the techniques of mass production for a small set of goods grew into broad position of industrial supremacy by the middle of the 20th century.

Looting: The Economic Underworld of Bankruptcy for Profit

macroeconomics, economic underworld, bankruptcy, profit

Ski-Lift Pricing, with an Application to the Labor Market

The market for ski runs or amusement rides often features lump-sum admission tickets with no explicit price per ride. Therefore, the equation of the demand for rides to the supply involves queues, which are systematically longer during peak periods, such as weekends. Moreover, the prices of admission tickets are much less responsive than the length of queues to variations in demand, even when these variations are predictable. We show that this method of pricing generates nearly efficient outcomes under plausible conditions. In particular, the existence of queues and the "stickiness" of prices do not necessarily mean that rides are allocated improperly or that firms choose inefficient levels of investment. We then draw an analogy between "ski-lift pricing" and the use of profit-sharing schemes in the labor market. Although firms face explicit marginal costs of labor that are sticky and less than workers' reservation wages, and although the pool of profits seems to create a common-property problem for workers, this method of pricing can approximate the competitive outcomes for employment and total labor compensation.

What Parts of Globalization Matter for Catch-Up Growth? [Küreselleşmenin Hangi Kısımları Yetişim Büyümesi İçin Önemlidir?]

Fisher (2003), verdiği Ely Semini’inde küreselleşmeyi sınırları aşan ekonomik ve ekonomik olmayan etkileşimler olmak üzere ikiye ayırmıştır. “Devletlerarasındaki hâlihazırda büyümekte olan birbirine bağımlılık süreci olarak ifade edilen ekonomik küreselleşme, artan sınır ötesi mal ve hizmet ticareti, yükselen sermaye akışı hacimleri ve artan işgücü hareketleri şeklinde yansımaktadır.” Kısa bir süre önce, Charles Jones ve ben analizleri bir adım daha derine taşıyabileceğimizi tartışmıştık (Jones ve Romer 2010). Küreselleşme, fikirlerin tekrar kullanılmasından elde edilen kazanımlar tarafından teşvik edilmektedir. Fikirlerin akışının, küreselleşmenin fakirliğin azaltılması ve yetişim büyümesi (catch-up growth) sağlaması için önemli olan kısmı olmasına rağmen birçok ekonomist, bu konuda uygun kelimeleri bulmakta zorlandığından dolayı hala konuşmaya çekinmektedir