This paper develops a dynamic, general equilibrium model of specialization-driven growth in which private coordination costs are decreasing in public expenditure on physical and institutional infrastructure. The model provides an explicitly economic explanation of the secular rise of government....

Economic studies of religion tend to focus on religious affiliation and attendance at religious services to the exclusion of other dimensions of religion, including religious belief. We address this lacuna, using data from the World Values Survey to construct an index of religious beliefs based...

This paper presents a unified theory of growth involving human capital accumulation, labor specialization, market expansion and falling fertility rates. The model suggests these processes, often analyzed separately, are intimately linked. The accumulation of specialized human capital increases...

This paper develops a general equilibrium model endogenizing labor specialization, firm size, firm specialization, interfirm trade, and economic fragmentation. In contrast to the standard neoinstitutionalist understanding of firms and markets as substitutes in organizing production, firms and...

In this paper, we model the co-evolution of the division of labor and informal institutions based on three assumptions. First, informal institutions lower coordination costs among specialists, which increases the equilibrium division of labor. Second, advances in the division of labor increase...

Does culture affect the manner in which a society regulates the entry of new firms? Our results suggest it does. We find more individualistic countries regulate entry more lightly. This result is robust to different measures of individualism and to a variety of controls for cultural values and...

This note presents a simple model of Hirschman and Rothschild’s (1973) tunnel effect, which is generally interpreted as reducing inequality aversion. The model identifies two separate tunnel effects, associated with own-sector and inter-sector productivity shocks, that are closely related to...