We provide a unified theory of the transition in income, life expectancy, education, and population size from a nondeveloped environment to sustained growth. Individuals optimally trade off the time cost of education with its lifetime returns. Initially, low longevity implies a prohibitive cost...

This paper presents a microfounded theory of long-term development. We model the interplay between economic variables, namely the process of human capital formation and technological progress, and the biological constraint of finite lifetime expectancy. All these processes affect each other and...

This paper presents a model of the labor market in which unemployed workers are uncertain about their relative ability to find a job. Unsuccessful search induces individuals to revise their beliefs downwards. Once self-confidence is sufficiently low, workers become discouraged and give up on...

We analyze the endogenous evolution of economic and political institutions and the interdependencies with the process of economic development. Favorable economic institutions ensure the appropriability of rents in form of a state of law. We study the conditions under which a state of law can be...

The paper examines real and nominal wage rigidities. We estimate a switching regime model, in which the observed distribution of individual wage changes, computed from West German register data for 1976-1997, is generated by simultaneous processes of real, nominal or no wage rigidity, and...

Is the way that people make risky choices, or tradeoffs over time, related to cognitive ability? This paper investigates whether there is a link between cognitive ability, risk aversion, and impatience, using a representative sample of the population and incentive compatible measures. We conduct...

Praktisch alle wirtschaftlich entwickelten Länder der Welt sind demokratisch. Sind demokratische Strukturen also kausal für wirtschaftlichen Wohlstand und Wachstum? Oder ist es vielmehr der wirtschaftliche Entwicklungsstand eines Landes, der eine Demokratie erst ermöglicht? Dieser Artikel...

Geringqualifizierte haben in Deutschland ein weitaus höheres Risiko arbeitslos zu werden als Fachkräfte. Kann ein subventionierter Niedriglohnsektor - wie er derzeit im Bündnis für Arbeit diskutiert wird - zur Lösung ihres Arbeitsplatzproblems beitragen? In welchem Umfang werden...