In a model with heterogeneity in managerial talent, we compare the economicand political consequences of reforms aimed at reducing fixed costs of entry (deregulation)and improving the efficiency of financial markets (financial reform). Theeffects of these reforms depend on the market where...

This bold, imaginative book advances an entirely new theory of voters’ behavior.The starting point for this theory is that individuals are endowed with a set of beliefs, ora worldview, and derive psychological benefits from acting in accordance with these beliefs.However, the beliefs of most...

We present a theory of ethnic conflict in which coalitions formed along ethnic lines competefor the economy’s resources. The role of ethnicity is to enforce coalition membership: inethnically homogeneous societies members of the losing coalition can defect to the winnersat low cost, and this...

We discuss political economy mechanisms which can explain the resource curse,in which an increase in the size of resource rents causes a decrease in the economy’stotal value added. We identify a number of channels through which resource rentswill alter the incentives of a political leader....

Growth accounting consists of a set of calculations resulting in a measure ofoutput growth, a measure of input growth, and their difference, most commonlyreferred to as total factor productivity (TFP) growth. It can be performed atthe level of the plant, firm, industry, or aggregate economy.[...]

We study cross-country differences in the aggregate production function whenskilled and unskilled labor are imperfect substitutes. We find that there is a skill biasin cross-country technology differences. Higher-income countries use skilled labormore efficiently than lower-income countries,...

In this paper we apply the same framework totime-series data from the United States over theperiod 1963–1992. We find that throughout thisperiod the efficiencies of skilled labor and capitalhave risen. The efficiency of unskilled laborhas risen in tandem with those of the otherfactors in the...

There are two sources of inconsistency in existing cross-country empiricalwork on growth: correlated individual effects and endogenous explanatoryvariables. We estimate a variety of cross- country growth regressions usinga generalized method of moments estimator that eliminates both problems.In...

[...]What might account for this link between parentalincome and children’s income? Many economists believethat this relationship is due in large part to differentialhuman-capital investment between high-income andlow-income families. High-income parents can invest inmore (and better)...