This paper provides a unified theory of the economic and demographic transition. Individualsmake optimal decisions about fertility, education of their children and the type and intensity ofthe investments in their own education. These decisions are affected by different dimensionsof mortality...

This paper investigates the long-run nexus between wealth inequality and aggregate output using a DSGE model in which wealth inequality endogenously affects individual entrepreneurship incentives, thereby influencing aggregate output. Our model passes the indirect inference test against the UK...

We fully characterize the transition to sustained growth of resource-constrained economies using a model of industrialization that reproduces key stylized facts of resource use and prices. Natural scarcity, endogenous demography and innovations generate different growth regimes: knowledge-based...

The paper examines the impacts of heterogeneity in the degree of relative risk aversion on the balance on current account in the framework of endogenous growth, and concludes that, like heterogeneity in demographic changes, heterogeneity in the degree of relative risk aversion generates...

The paper examines the impacts of heterogeneity in the degree of relative risk aversion on the balance on current account in the framework of endogenous growth, and concludes that, like heterogeneity in demographic changes, heterogeneity in the degree of relative risk aversion generates...

We calibrate an endogenous growth model to study the effect of the quality of human capital on productivity growth in a sample of thirty developed and developing countries for the period 1980 to 2007. We measure quality of human capital by relative cognitive skills. These are country scores in...

This paper studies China's four-fold increase in per capita GDP relative to the U.S. between 1995 and 2019. First, we argue that China's growth pattern is very similar to that of several other East Asia economies that initially grew very quickly. Second, we show that a minimalist...

This paper introduces endogenous longevity risk in an otherwisestandard overlapping generations model with capital. In the model, an agent mayincrease the length of her old age by incurring investments in her own health fundedfrom her wage income. Such private health investments are more...

Extreme events are one of the main channels through which climate and socio- economic systems interact. It is likely that climate change will modify their probability distributions and their consequences. The long-term growth models used in climate change assessments, however, cannot capture the...

We study how the output gap affects potential output over time-i.e., the dynamic hysteresis effect. To do so, we introduce novel unobserved components (UC) models that consider hysteresis as a sequence of lagged effects, thus separating the long-run recession-induced adverse effects from other...