that the answer is yes.

The most important result of our analysis is we that find significant departures from the sets of conditions that the previous literature has identified as capturing the key forces behind balanced growth. In particular, we find evidence that factor shares are not common across sectors and that...

We illustrate the usefulness of our approach by applying it to the so called Balassa-Samuelson effect, that is, in a cross sectional sense, countries with higher ppp adjusted incomes tend to have higher aggregate price levels (in a common numeraire). We show that as the US economy develops, its...

Most real-world trade liberalizations decrease tariffs and increase quotas without completely abolishing them. We ask how decreases in tariffs and increases in quotas affect productivity in an economy with monopoly rights in the import-competing sector. We show that a reduction in a tariff can...

We ask for which part of the observed cross-country differences in the level of per-capita income monopoly rights can account. We answer this question in a calibrated growth model with capital. Monopoly rights in the capital-producing sector shield labor market insiders from the competition by...

Standard models of economic development typically ignore geography and transport. In this paper, we argue that we should model the transport sector, as it plays a quantitatively important role.\\ To understand what will determine the importance of the transport sector, consider the transport...

Standard growth accounting exercises find large cross--country differences in aggregate TFP. Here we ask whether specific sectors are driving these differences, and, if this is the case, which these problem sectors are. We argue that to answer these questions we need to consider four sectors. In...

We ask whether the three-sector neoclassical growth model can account for the large cross-country differences in the levels of per-capita income, in the stocks of physical and human capital, and in the relative prices of capital. We use a version in which one sector produces services, a second...

It is well known that poor countries are much less productive in agriculture than in the rest of the economy, and that it is hard to account for these productivity gaps. In this paper, we study US states during 1980–2009. We find that there are large productivity gaps between agriculture...