A longstanding question in economics is why some countries are so much richer than others. Today, for example, income per capita in the world's richest countries is roughly thirty-five times greater than it is in the world's poorest countries. Recent work argues that the proximate cause of the disparity is that today's poor countries began the process of industrialization much later and that this process is slow. In this paper we argue that a model of structural transformation provides a useful theory of both why industrialization occurs at different dates, and why it proceeds slowly. A key implication of this model is that growth in agricultural productivity is central to development, a message that also appears prominently in the traditional development literature.

https://web.williams.edu/Economics/wp/Gollin_The_Role_of_Agriculture_in_Development.pdf

The Role of Agriculture in Development

A unified growth theory is developed that accounts for the roughly constant living standards displayed by world economies prior to 1800 as well as the growing living standards exhibited by modern industrial economies. Our theory also explains the industrial revolution which is the transition from an era when per capita incomes are stagnant to one with sustained growth.... [The authors] use a standard growth model with...[several] technologies. The first denoted the Malthus technology requires land labor and reproducible capital as inputs. The second denoted the Solow technology does not require land. [The authors] show that in the early stages of development only the Malthus technology is used and due to population growth living standards are stagnant despite technological progress. Eventually technological progress causes the Solow technology to become profitable and both technologies are employed. At this point living standards improve since population growth has less influence on per capita income growth. In the limit the economy behaves like a standard Solow growth model. (EXCERPT)

Malthus to Solow

Financial literacy: A systematic review and bibliometric analysis

https://www.zora.uzh.ch/id/eprint/8554/2/2008_FoellmiZweim%C3%BCller_structural_change_engel_kaldorV.pdf

Structural change, Engel's consumption cycles and Kaldor's facts of economic growth

This paper develops empirical growth models suitable for dual economies, and studies the relationship between structural change and economic growth. Changes in the structure of employment will raise aggregate productivity when the marginal product of labor varies across sectors. The models in the paper incorporate this effect in a more flexible way than previous work. Estimates of the models imply sizeable marginal product differentials, and indicate that the reallocation of labor makes a significant contribution to the international variation in productivity growth.

https://www.econstor.eu/bitstream/10419/73835/1/IfoWorkingPaper-33.pdf

Dualism and cross-country growth regressions

Focusing on different facades of financial well-being such as wealth accumulation and retirement planning, various determinants of financial well-being have been unearthed, and financial literacy has emerged as a crucial factor that increases financial well-being. Hence, financial literacy has been an important policy instrument to increase the financial well-being of individuals, particularly given that it is relatively easy to implement. This paper is an attempt to pave the way for such policies in a group of middle income countries, namely Mexico, Lebanon, Uruguay, Colombia and Turkey. After establishing financial literacy levels, we identify the least financially literate groups in each country to facilitate targeting of public policy. We find that women, younger adults and individuals who cannot read or write in the official language of their country of residence have lower financial literacy scores. In line with the previous findings in the literature on the developed countries, our results indicate that financial literacy increases with education. We also show that it is not only the years of education, but also the quality. In Mexico and Turkey, there are large regional differences that must be addressed. We also find that differences in financial literacy across countries persist even when differences in structural characteristics are taken into account. A partial explanation may be provided by differences in financial inclusion.

/pdf/financial-literacy-in-developing-countries-3ix2kl1kxi.pdf

Financial Literacy in Developing Countries

The US went through a remarkable structural transformation between 1800 and 2000 A precipitous decline in the importance of agricultural goods in the economy was matched by the rapid ascent of a plethora of new non-agricultural goods and services A competitive model is presented here where consumption evolves along the extensive margin This lessens the need to rely on satiation points, subsistence levels of consumption, and the like to explain agriculture’s demise The analysis suggests that between 1800 and 2000 economic welfare grew by at least 15% a year, and may be as much as 10% annually, the exact number depending upon the metric preferred

/pdf/new-goods-and-the-transition-to-a-new-economy-12kauxxw7i.pdf

New Goods and the Transition to a New Economy

The U.S. went through a remarkable structural transformation between 1800 and 2000. In 1800 the majority of people worked in agriculture. Barely anyone did by 2000. What caused the rapid demise of agriculture in the economy? The analysis here concentrates on the development of new consumer goods associated with technological progress. The introduction of new goods into the framework eliminates the need to rely on satiation points, subsistence levels of consumption, and the like. The analysis suggests that between 1800 and 2000 economic welfare grew by at least 1.5 percent a year, and maybe as much 10 percent annually, the exact number depending upon the metric preferred.

Focusing on different façades of financial well-being such as wealth accumulation and retirement planning, various determinants of financial well-being have been unearthed, and financial literacy has emerged as a crucial factor that increases financial well-being. Hence, financial literacy has been an important policy instrument to increase the financial well-being of individuals, particularly given that it is relatively easy to implement. This paper is an attempt to pave the way for such policies in a group of middle income countries, namely Mexico, Lebanon, Uruguay, Colombia and Turkey. After establishing financial literacy levels, we identify the least financially literate groups in each country to facilitate targeting of public policy. We find that women, younger adults and individuals who cannot read or write in the official language of their country of residence have lower financial literacy scores. In line with the previous findings in the literature on the developed countries, our results indicate that financial literacy increases with education. We also show that it is not only the years of education, but also the quality. In Mexico and Turkey, there are large regional differences that must be addressed. We also find that differences in financial literacy across countries persist even when differences in structural characteristics are taken into account. A partial explanation may be provided by differences in financial inclusion.

/pdf/financial-literacy-in-developing-countries-1km29lra4j.pdf

Financial literacy in developing countries

The U.S. went through a remarkable structural transformation between 1800 and 2000. In 1800 the majority of people worked in agriculture. Barely anyone did by 2000. What caused the rapid demise of agriculture in the economy? The analysis here concentrates on the development of new consumer goods associated with technological progress. The introduction of new goods into the framework lessens the need to rely on satiation points, subsistence levels of consumption, and the like. The analysis suggests that between 1800 and 2000 economic welfare grew by at least 1.5 percent a year, and maybe as much as 10 percent annually, the exact number depending upon the metric preferred.

/pdf/new-goods-and-the-transition-to-a-new-economy-39o5psiklo.pdf

Gökçe Uysal

Papers

Financial Literacy in Developing Countries

New Goods and the Transition to a New Economy

New Goods and the Transition to a New Economy

Financial literacy in developing countries

New Goods and the Transition to a New Economy