This paper introduces wealth-dependent time preference into a simplemodel of endogenous growth. The model generates adjustment dynamics in linewith the historical facts on savings and economic growth in Europe from the HighMiddle Ages to today. Along a virtuous cycle of development more wealth...

This paper proposes a model that links households and firms, as usual, by markets forfactors and goods and, additionally, by a banking sector that channels households’funds to firms and eliminates idiosyncratic risk. In equilibrium, agency costs and taxbenefits of corporate debt are equalizing...

Does it make us unhappier when we compare our consumptionwith that of the Joneses or our own past achievements? This paper tries ananswer by bringing together two disparate literatures: the macro (growth)theory on habit formation and the applied literature related to the Easterlinparadox. Using...

We provide evidence that the robust association between cognitive skills and economic growth reflects a causal effect of cognitive skills and supports the economic benefits of effective school policy. We develop a new common metric that allows tracking student achievement across countries, over...

Economic development in Latin America has trailed most other world regions over the past four decades despite its relatively high initial development and school attainment levels. This puzzle can be resolved by considering the actual learning as expressed in tests of cognitive skills, on which...

We estimate the effect of broadband infrastructure, which enables high-speed internet, on economic growth in the panel of OECD countries in 1996-2007. Our instrumental-variable model derives its non-linear first stage from a logistic diffusion model where pre-existing voice-telephony and...

We explore the relationships between subjective well-being and income, as seen across individuals within a given country, between countries in a given year, and as a country grows through time. We show that richer individuals in a given country are more satisfied with their lives than are poorer...

Existing growth research provides little explanation for the very large differences in long-run growth performance across OECD countries. We show that cognitive skills can account for growth differences within the OECD, whereas a range of economic institutions and quantitative measures of...

"The role of improved schooling, a central part of most development strategies, has become controversial because expansion of school attainment has not guaranteed improved economic conditions. This paper reviews the role of education in promoting economic well-being, with a particular focus on...