In this paper, we study how macroeconomic volatility affects social welfare through its impact on political institutions. In the presence of asymmetric information on the quality of politicians, volatility shapes political outcomes in two ways: (1) it alters the incentives of incumbents by...

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....