What caused the baby boom? And, can it be explained within the context of the secular decline in fertility that has occurred over the last 200 years? The hypothesis is that: 1. The secular decline in fertility is due to the relentless rise in real wages that increased the opportunity cost of...

Some facts characterizing the U.S. economic development in the 19th century are: (i) the westward movement of population; (ii) the accumulation of productive land; and (iii) the wage gap in favor of the West. An overlapping-generations model is developed, to account for these facts. The model's...

During the first half of the 20th century the workweek in the United States declined, and the distribution of hours across wage deciles narrowed. At the same time, the distribution of wages narrowed too. The hypothesis proposed is (i) Households have access to an increasing number of leisure...

What drove western population growth in the U.S. during the 19th century? The facts are: (i) Natural increase was higher in the West than in the East; and (ii) in the early stages of the settlement process, net migration could account for up to 80% of population growth in some regions. A general...

The U.S. went through a remarkable structural transformation between 1800 and 2000. In 1800 the majority of people worked in agriculture. Barely anyone did by 2000. What caused the rapid demise of agriculture in the economy? The analysis here concentrates on the development of new consumer goods...

How important is financial development for economic development? A costly state verification model of financial intermediation is presented to address this question. The model is calibrated to match facts about the U.S. economy, such as intermediation spreads and the firm-size distribution for...

Societies socialize children about sex. This is done in the presence of peer-group effects, which may encourage undesirable behavior. Parents want the best for their children. Still, they weigh the marginal gains from socializing their children against its costs. Churches and states may...

Growth theory goes a long way toward explaining phenomena in labor economics linked with U.S. economic development. Some examples are: (a) the secular decline in fertility between 1800 and 1980, (b) the decline in agricultural employment and the rise in skill since 1800, (c) the demise of child...

To address how technological progress in financial intermediation affects the economy, a costly-state verification framework is embedded into the standard growth model. The framework has two novel ingredients. First, firms differ in the risk/return combinations that they offer. Second, the...

In 1900 only six percent of unwed females engaged in premarital sex. Now, three quarters do. The sexual revolution is studied here using an equilibrium matching model, where the costs of premarital sex fall over time due to technological improvement in contraceptives. Individuals differ in their...