Rich Nations, Poor Nations: How Much Can Multiple Equilibria Explain?

This paper asks whether the income gap between rich and poor nations can be explained by multiple equilibria. We explore the quantitative implications of a simple two-sector general equilibrium model that gives rise to multiplicity, and calibrate the model for 127 countries. Under the assumptions of the model, around a quarter of the world’s economies are found to be in a low output equilibrium. We also find that, since the output gains associated with an equilibrium switch are sizeable, the model can explain between 15 and 25% of the variation in the logarithm of GDP per worker across countries.     

Standards,learning, and growth in Britain, 1901–2009

This article considers the model of voluntary, consensus based standardization as developed through the British Standards Institution (BSI) and its contribution to learning and productivity growth. It discusses the significant role played by professional engineers in the model's introduction, its extension at home, and its imitation overseas. It is argued that by 1931 the BSI catalogue of standards represented a considerable stock of codified knowledge whose growth reflected underlying aggregate technological opportunities, assisting in their transformation into technological advance. To help validate this claim, a measure of the size of the BSI catalogue of standards is incorporated into an econometric model of aggregate productivity growth in Britain. Findings show that the growth of the standards catalogue is associated with a substantial proportion of labour productivity growth over the period 1931–2009. Estimates relating to the short‐run dynamics involved are consistent with the idea that there are causal linkages running from standards to growth. When interpreting these findings, it is argued that the overall weight of historical evidence points to standardization—coordinated through the BSI—as providing an important path of learning for the British economy over the period considered.     

The geography of output volatility

This paper examines the structural determinants of output volatility in developing countries, and especially the roles of geography and institutions. We investigate the volatility effects of market access, climate variability, the geographic predisposition to trade, and various measures of institutional quality. We find an especially important role for market access: remote countries are more likely to have undiversified exports and to experience greater volatility in output growth. Our results are based on Bayesian methods that allow us to address formally the problem of model uncertainty and to examine robustness across a wide range of specifications.     

Growth Regressions and What the Textbooks Don't Tell You

The paper discusses three econometric problems that are rarely given adequate discussion in textbooks: model uncertainty, parameter heterogeneity, and outliers. Leamer's extreme bounds analysis can be adapted to address all three problems simultaneously. Two examples are presented based on an influential cross-country growth paper by Levine and Renelt ( American Economic Review , vol. 82, 1992, pp. 942-63).     

Participatory determinants of innovation and their impact on plantain production systems in Cameroon

Current statistics question the capacity of food-crop production to meet the challenges of food security in Central Africa. However, for local food crops like plantain, the potential for improving productivity is very high. In response to this challenge, after identification of the most serious constraints, an interdisciplinary team used participatory research and action-research tools to try and speed up the adoption of technical innovation by farmers. The project began in 1990 in South-West Province and subsequently expanded to include 100 plantain producers and 60 extension technicians in the Central and Southern Provinces of Cameroon. The approach used produced satisfactory results as far as the adoption and dissemination of methods of multiplication and cleaning of planting material were concerned but there was resistance to new cropping practices involving intercrops and crop rotation. The project resulted in major technical changes in plantain production systems in Cameroon that not only increased productivity and food security but also reduced deforestation showing that sustainable intensification is possible in sub-Saharan Africa.     

Reform and competitive selection in China: An analysis of firm exits

This paper considers aspects of the competitive selection process in China – firm entry, survival, and exit – in an important sector of manufacturing, looking in particular for changes resulting from the process of reform. Using industry census data from a province in North-East China, we find substantial differences in the process between ownership types. By conducting decompositions of aggregate growth and exploring the determinants of firm's exit using a hazard rate model, we observe a substantial rate of churning of enterprises in the sector, finding that the competitive selection processes operate, for small and collectively owned enterprises (COEs), in a manner consistent with what is known about a private market economy. While the hazard for state owned enterprises (SOEs) is lower than for COEs, we find that the reforms introduced in 1992 were important in closing the gap for similarly situated firms.     

Inflation and Growth: Stories Short and Tall

This paper reviews the stories that economists tell about the growth effects of inflation. Informal accounts are common, but there are few models that get to grips with the effects that are probably central. Partly as a result of this, and partly as a result of many econometric problems, much of the empirical evidence remains unconvincing. The paper assesses the various contributions, and suggests possible improvements.     

Taking the measure of things: the role of measurement in EU trade

In this paper theoretical and empirical models of intra-industry trade are developed in which economic activities, based on measurement and an associated measurement infrastructure, play a role in creating product variety. The paper discusses how the measurement infrastructure which includes institutions conducting metrological research and standard setting organization reduces transactions costs, especially in markets where differences in product characteristics are important. The theoretical analysis focuses on the public good characteristics of the measurement infrastructure, considering how the infrastructure impacts upon trade in a model based upon product differentiation under monopolistic competition. In the econometric analysis, indicators of the strength of the infrastructure within the EU, both across industries and across countries, suggest that measurement activities are important in determining the extent of bi-lateral EU intra-industry trade. Despite many common elements in the measurement infrastructure across the EU, there is also some evidence of differential access to the infrastructure among EU members.     

Growth and Wage Inequality in a Dual Economy

Who benefits from economic growth? This paper analyses the distributional impact of different types of growth within a two‐sector model. The paper first presents necessary and sufficient conditions for unambiguous changes in wage inequality in a dual economy, based on analysis of the entire Lorenz curve. These conditions are then applied to the Harris–Todaro model with an urban non‐agricultural sector and rural agriculture. It is shown that capital accumulation or technical progress in agriculture can shift the Lorenz curve inwards and reduce wage inequality, while the effects of development in non‐agriculture are typically ambiguous.