We develop generalised indirect inference procedures that handle equality and inequality constraints on the auxiliary model parameters. We also show that the asymptotic efficiency of such estimators can never decrease by explicitly taking into account Lagrange multipliers associated with...

What role does labor play in a firm’s market value? We explore this question using a production-based asset pricing model with frictions in the adjustment of both capital and labor. We posit that hiring of labor is akin to investment in capital and that the two interact, with the interaction...

Economies at early stages of development are often shaken by abrupt changes in growth rates, whereas in advanced economies growth rates tend to be relatively stable. To explain this pattern, we propose a theory of technological diversification. Production makes use of different input varieties,...

This paper presents a model of endogenous innovation and growth, in which technological change is path dependent. The historical pattern of technological development plays a central role in determining the pace of future technological change. Path dependence is explained using a distinction...

Convergence concerns poor economies catching up with rich ones. At is- sue is what happens to the cross sectional distribution of economies, not whether a single economy tends towards its own steady state. It is the latter, however, that has preoccupied the traditional approach to con- vergence...

This paper presents a historical database on educational attainment in 74 countries for the period 1870-2010, using perpetual inventory methods before 1960 and then the Cohen and Soto (2007) database. The correlation between the two sets of average years of schooling in 1960 is equal to 0.96. We...

This paper is the first empirical framework that explains the phenomenon of fast growth combined with the demographic transition occurring in the United States since 1860. I propose a structural model that unifies those events through the role of education: the key feature is that parental...

This paper investigates the impact of Information and Communication Technologies (ICT) on growth in an economy, consisting of three sectors, ICT-producing, ICT-using and non-ICT-using. The benefits from ICT come from the falling prices of the ICT-using sector’s good, which is used for the...