Author
Nikola Mirković
Bio: Nikola Mirković is an academic researcher. The author has an hindex of 1, co-authored 1 publications receiving 23 citations.
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TL;DR: In this paper, the authors present evidence from seven Latin American countries that natural resource booms are sometimes accompa- nied by declining per-capita GDP, and they present a model with natural resources, increasing returns in the spirit of big push models.
1,581 citations
TL;DR: In this article, the authors show that the assumption of optimal resource allocation fails and that the heterogeneity of rates of return to the same factor within a single economy, a heterogeneity that dwarfs the cross-country heterogeneity in the economy-wide average return, poses problems for old and new growth theories alike.
Abstract: Growth theory traditionally assumed the existence of an aggregate production function, whose existence and properties are closely tied to the assumption of optimal resource allocation within each economy. We show extensive evidence, culled from the microdevelopment literature, demonstrating that the assumption of optimal resource allocation fails radically. The key fact is the enormous heterogeneity of rates of return to the same factor within a single economy, a heterogeneity that dwarfs the cross-country heterogeneity in the economy-wide average return. Prima facie, we argue, this evidence poses problems for old and new growth theories alike. We then review the literature on various causes of this misallocation. We go on to calibrate a simple model which explicitly introduces the possibility of misallocation into an otherwise standard growth model. We show that, in order to match the data, it is not enough to have misallocated factors: There also needs to be important fixed costs in production. We conclude by outlining the contour of a possible non-aggregate growth theory, and review the existing attempts to take such a model to the data.
809 citations
284 citations
TL;DR: In this paper, the authors argue that the differential performance of economies over time is fundamentally influenced by the way institutions evolve, and that institutions affect the performance of the economies they serve.
Abstract: “That institutions affect the performance of economies is hardly controversial. That the differential performance of economies over time is fundamentally influenced by the way institutions evolve is also not controversial.” (North 1990, p. 3)
150 citations
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TL;DR: This paper used a static general equilibrium model to explore the relationship between high transportation costs, low productivity, and the size of the quasi-subsistence sector in Ugandan agriculture, and found that the population in quasi-sistence agriculture is highly sensitive both to agricultural productivity levels and to transportation costs.
Abstract: A large fraction of Uganda's population continues to earn a living from quasi-subsistence agriculture. This paper uses a static general equilibrium model to explore the relationships between high transportation costs, low productivity, and the size of the quasi-subsistence sector. We parameterize the model to replicate some key features of the Ugandan data, and we then perform a series of quantitative experiments. Our results suggest that the population in quasi-subsistence agriculture is highly sensitive both to agricultural productivity levels and to transportation costs. The model also suggests positive complementarities between improvements in agricultural productivity and transportation.
131 citations