We study how the output gap affects potential output over time-i.e., the dynamic hysteresis effect. To do so, we introduce novel unobserved components (UC) models that consider hysteresis as a sequence of lagged effects, thus separating the long-run recession-induced adverse effects from other...

We use the real wage-profit rate schedule to examine the direction of technical change in India's organized manufacturing sector during 1980-2007. We find that technical change was Marx biased (i.e., declining capital productivity with increasing labor productivity) through the 1980s and 1990s;...

This paper presents a quantitative analysis of the model developed in Galor and Moav, Natural Selection and the Origin of Economic Growth (2002), in which agents vary genetically in their preference for quality and quantity of children. The simulation produces a pattern of income and population...

Venture capital (VC) and growth are examined both empirically and theoretically. Empirically, VC-backed startups have higher early growth rates and initial patent quality than non-VC-backed ones. VC backing increases a startup's likelihood of reaching the right tails of the firm size and...

This research argues that the rapid expansion of international trade in the second phase of the industrial revolution has played a significant role in the timing of demographic transitions across countries and has thereby been a major determinant of the distribution of world population and a...

This research argues that the rapid expansion of international trade in the second phase of the industrial revolution has played a major role in the timing of demographic transitions across countries and has thereby been a significant determinant of the distribution of world population and a...

We investigate to what extent tolerance, as measured by attitudes toward different types of neighbors, affects economic growth. Data from the World Values Survey enable us to investigate tolerance-growth relationships for 54 countries. We provide estimates based on cross-sectional as well as...

This paper explores the implications of Unified Growth Theory for the origins of existing differences in income per capita across countries. The theory sheds light on three fundamental layers of comparative development. It identifies the factors that have governed the pace of the transition from...

This research argues that the differential effect of international trade on the demand for human capital across countries has been a major determinant of the distribution of income and population across the globe. In developed countries the gains from trade have been directed towards investment...

This paper studies the implications of internal consumption habit for propagation and monetary transmission in New Keynesian dynamic stochastic general equilibrium (NKDSGE) models. We use Bayesian methods to evaluate the role of internal consumption habit in NKDSGE model propagation and monetary...