From the standpoint of policies, the different branches of economics may be aggregated into two categories: dirigiste and laissez fairist. Dirigiste theories in economics have been based primarily on the complexity of commodities: this allows commodities to be ranked according to the...

Recent development and growth accounting studies have established that total factor productivity is an important source of cross-country differences in income levels and growth rates. This paper makes two contributions. First, it examines the sensitivity of the development accounting results to...

There has been a revival of interest in small industries and their linkages with a nation's institutional arrangements among both academicians and policy makers. Extending the definition of institutions to include formal and informal rules, this paper attempts to identify these linkages using...

Becoming a rich country requires the ability to produce and export commodities that embody certain characteristics. We classify 779 exported commodities according to two dimensions: (1) sophistication (measured by the income content of the products exported); and (2) connectivity to other...

The transition paths from plan to market have varied markedly across countries. Central and Eastern European and the Baltic countries, which opted for a fast and profound transformation of their institutions including business climates, rapidly narrowed the productivity gap with advanced...

The year 2017 marks the 50th anniversary of William J. Baumol’s seminal model of "unbalanced growth", which predicts the so-called "Growth Disease", i.e., the tendency of aggregate productivity growth to slow down in the process of tertiarisation. In an important contribution published in...

This paper constructs simple models in which industrialization is driven by human capital accumulation. Industrialization can explain the robust correlation between equipment investment and growth in developing countries. We show that government intervention is justified within our stylized...

The central question in modern regulatory states is how to balance the sword of public enforcement with the setting of incentives for firms to comply with the law - broadly, to pursue the public good - just because it is in their interest to do so. We assess the ability of the state to encourage...

This paper studies a model of the distribution of income under bounded needs. Utility derived from any given good reaches a bliss point at a finite consumption level of that good. On the other hand, introducing new varieties always increases utility. It is assumed that each variety is owned by a...

The role of historical accident in technology selection has been difficult to measure. This paper develops a quantifiable model for a basic and widely applicable form of path dependence: the random walk. This real options model is applied to the transition in British cotton spinning at the...