Book•
Unified Growth Theory
01 May 2011-
TL;DR: Galor et al. as discussed by the authors presented a unified theory of economic growth from the dawn of civilization to today, and explained the worldwide disparities in living standards and population we see today, providing a comprehensive overview of the three phases of the development process.
Abstract: For most of the vast span of human history, economic growth was all but nonexistent. Then, about two centuries ago, some nations began to emerge from this epoch of economic stagnation, experiencing sustained economic growth that led to significant increases in standards of living and profoundly altered the level and distribution of wealth, population, education, and health across the globe. The question ever since has been--why?This is the first book to put forward a unified theory of economic growth that accounts for the entire growth process, from the dawn of civilization to today. Oded Galor, who founded the field of unified growth theory, identifies the historical and prehistorical forces behind the differential transition timing from stagnation to growth and the emergence of income disparity around the world. Galor shows how the interaction between technological progress and population ultimately raised the importance of education in coping with the rapidly changing technological environment, brought about significant reduction in fertility rates, and enabled some economies to devote greater resources toward a steady increase in per capita income, paving the way for sustained economic growth. - Presents a unified theory of economic growth from the dawn of civilization to today - Explains the worldwide disparities in living standards and population we see today - Provides a comprehensive overview of the three phases of the development process - Analyzes the Malthusian theory and its empirical support - Examines theories of demographic transition and their empirical significance - Explores the interaction between economic development and human evolution
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TL;DR: The level of genetic diversity within a society is found to have a hump-shaped effect on development outcomes in both the pre-colonial and the modern era, reflecting the trade-off between the beneficial and the detrimental effects of diversity on productivity.
Abstract: This research advances and empirically establishes the hypothesis that, in the course of the prehistoric exodus of Homo sapiens out of Africa, variation in migratory distance to various settlements across the globe affected genetic diversity and has had a persistent humpshaped effect on comparative economic development, reflecting the trade-off between the beneficial and the detrimental effects of diversity on productivity. While the low diversity of Native American populations and the high diversity of African populations have been detrimental for the development of these regions, the intermediate levels of diversity associated with European and Asian populations have been conducive for development. (JEL N10, N30, N50, O10, O50, Z10) Prevailing hypotheses of comparative economic development highlight various determinants of the remarkable inequality in income per capita across the globe. The significance of geographical, institutional, and cultural factors, human capital, ethnolinguistic fractionalization, colonialism, and globalization has been at the heart of a debate concerning the genesis of the astounding transformation in the pattern of comparative development over the past few centuries. While early research focused on the proximate forces that contributed to the divergence in living
870 citations
TL;DR: A growing body of new empirical work focuses on the measurement and estimation of the effects of historical variables on contemporary income by explicitly taking into account the ancestral composition of current populations as mentioned in this paper.
Abstract: The empirical literature on economic growth and development has moved from the study of proximate determinants to the analysis of ever deeper, more fundamental factors, rooted in long-term history. A growing body of new empirical work focuses on the measurement and estimation of the effects of historical variables on contemporary income by explicitly taking into account the ancestral composition of current populations. The evidence suggests that economic development is affected by traits that have been transmitted across generations over the very long run. This article surveys this new literature and provides a framework to discuss different channels through which intergenerationally transmitted characteristics may impact economic development, biologically (via genetic or epigenetic transmission) and culturally (via behavioral or symbolic transmission). An important issue is whether historically transmitted traits have affected development through their direct impact on productivity, or have operated indirectly as barriers to the diffusion of productivityenhancing innovations across populations. (JEL J11, O33, O47, Z13)
431 citations
TL;DR: The authors used a census-based dataset of 334 Prussian counties in 1849 to investigate the relationship between fertility and education and found that correlation between education and fertility runs both ways, based on separate instrumental-variable models that instrument fertility by sex ratios and education by landownership inequality and distance to Wittenberg education.
Abstract: The trade-off between child quantity and quality is a crucial ingredient of unified growth models that explain the transition from Malthusian stagnation to modern growth We present first evidence that such a trade-off indeed existed already in the nineteenth century, exploiting a unique census-based dataset of 334 Prussian counties in 1849 Furthermore, we find that causation between fertility and education runs both ways, based on separate instrumental-variable models that instrument fertility by sex ratios and education by landownership inequality and distance to Wittenberg Education in 1849 also predicts the fertility transition in 1880–1905
275 citations
TL;DR: In this paper, a simple two-sector model is proposed to differentiate average human capital (worker skills) from upper tail knowledge both theoretically and empirically. But the model predicts that the local presence of knowledge elites is unimportant in the pre-industrial era, but drives growth thereafter; worker skills, in contrast, are not crucial for growth.
Abstract: While human capital is a strong predictor of economic development today, its importance for the Industrial Revolution is typically assessed as minor. To resolve this puzzling contrast, we differentiate average human capital (worker skills) from upper tail knowledge both theoretically and empirically. We build a simple two-sector model, where worker skills raise the productivity in both agriculture and manufacturing, and scientific knowledge affects the entrepreneurial ability to keep up with a rapidly advancing technological frontier. The model predicts that the local presence of knowledge elites is unimportant in the pre-industrial era, but drives growth thereafter; worker skills, in contrast, are not crucial for growth. To measure the historical presence of knowledge elites, we use city-level subscriptions to the famous Encyclopedie in mid-18th century France. We show that subscriber density is a strong predictor of city growth after 1750, but not before the onset of French industrialization. Alternative measures of development confirm this pattern: soldier height and industrial activity are strongly associated with subscriber density after, but not before, 1750. Literacy, on the other hand, does not predict growth. Finally, by joining data on British patents with a large French firm survey from 1837, we provide evidence for the mechanism: upper tail knowledge raised the productivity in innovative industrial technology.
204 citations
Cites background from "Unified Growth Theory"
...Our paper is related to a large literature on the transition from stagnation to growth (for an overview see Galor, 2011), and in particular to the role of human capital during industrialization....
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TL;DR: In this article, the authors scrutinized the recently postulated link between the European Marriage Pattern (EMP) and economic success and found that there is no evidence that the EMP improved economic performance by empowering women, increasing human capital, adjusting population to economic trends, or sustaining beneficial cultural norms.
Abstract: This article scrutinizes the recently postulated link between the European
Marriage Pattern (EMP) and economic success. Multivariate analysis of 4,705
demographic observations, covering women’s marriage age, female lifetime
celibacy, and household complexity in 39 European countries, shows that the
most extreme manifestations of the EMP were associated with economic
stagnation rather than growth. There is no evidence that the EMP improved
economic performance by empowering women, increasing human capital
investment, adjusting population to economic trends, or sustaining beneficial
cultural norms. European economic success was not caused by the EMP and its
sources must therefore be sought in other factors.
158 citations
Additional excerpts
...1 Guinnane (2012), 2; Galor (2011), 115-40; Acemoglu (2009), 732-6....
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