Estimates for the U.S. suggest that at least in some sectors productivity enhancing reallocation is the dominant factor in accounting for producitivity growth. An open question, particularly relevant for developing countries, is whether reallocation is always productivity enhancing. It may be...

Investment in machinery is a key aspect in the analysis of long-term economic growth during the era of the spread of industrialisation. But, historiography has only revealed what the pace of capital accumulation was in a few Latin American economies. This article offers continuous (annual) and...

A key aspect of industrialization is the adoption of increasing-returns-to-scale, industrial, technologies. Two other, well-documented aspects are that industrial technologies are adopted throughout intermediate-input chains and that they use intermediate inputs intensively relative to the...

This paper studies the effects of financial liberalization and banking crises on growth. It shows that financial liberalization spurs on average economic growth. Banking crises are harmful for growth, but to a lesser extent in countries with open financial systems and good institutions. The...

We discuss a unified theory of directed technological change and technology adoption that can shed light on the causes of persistent productivity differences across countries. In our model, new technologies are designed in advanced countries and diffuse endogenously to less developed countries....

We analyze recent contributions to growth theory based on the model of expanding variety of Romer (1990). In the first part, we present different versions of the benchmark linear model with imperfect competition. These include the “labequipment” model, labor-for-intermediates” and...

We study a general equilibrium model in which entrepreneurs finance investment with optimal financial contracts. Because of enforceability problems, contracts are constrained efficient. We show that limited enforceability amplifies the impact of technological innovations on aggregate output....

This paper uses the ability to recall one’s age correctly as an indicator of numeracy. We show that low levels of nutrition impaired numeracy in industrializing England, 1780-1850. Numeracy declined markedly among those born during the war years, especially where wheat was dear. England’s...

Foreign aid provides a windfall of resources to recipient countries and may result in the same rent seeking behavior as documented in the “curse of natural resources” literature. In this paper we discuss this effect and document its magnitude. Using data for 108 recipient countries in the...

This paper ia an attempt to clarify the relationship between fractionalization, polarization and conflict. The literature on the measurement of ethnic diversity has taken as given that the proper measure for heterogeneity can be calculated by using the fractionalization index. This index is...