Trade Democracy And Economic Growth Four Essays In Dynamic Economics

The purpose of this paper is to empirically determine the effects of political instability on economic growth. Using the system-GMM estimator for linear dynamic panel data models on a sample covering up to 169 countries, and 5-year periods from 1960 to 2004, we find that higher degrees of political instability are associated with lower growth rates of GDP per capita. Regarding the channels of transmission, we find that political instability adversely affects growth by lowering the rates of productivity growth and, to a smaller degree, physical and human capital accumulation. Finally, economic freedom and ethnic homogeneity are beneficial to growth, while democracy may have a small negative effect.

Introduction to Modern Economic Growth is a groundbreaking text from one of today's leading economists. Daron Acemoglu gives graduate students not only the tools to analyze growth and related macroeconomic problems, but also the broad perspective needed to apply those tools to the big-picture questions of growth and divergence. And he introduces the economic and mathematical foundations of modern growth theory and macroeconomics in a rigorous but easy to follow manner. After covering the necessary background on dynamic general equilibrium and dynamic optimization, the book presents the basic workhorse models of growth and takes students to the frontier areas of growth theory, including models of human capital, endogenous technological change, technology transfer, international trade, economic development, and political economy. The book integrates these theories with data and shows how theoretical approaches can lead to better perspectives on the fundamental causes of economic growth and the wealth of nations. Innovative and authoritative, this book is likely to shape how economic growth is taught and learned for years to come. Introduces all the foundations for understanding economic growth and dynamic macroeconomic analysis Focuses on the big-picture questions of economic growth Provides mathematical foundations Presents dynamic general equilibrium Covers models such as basic Solow, neoclassical growth, and overlapping generations, as well as models of endogenous technology and international linkages Addresses frontier research areas such as international linkages, international trade, political economy, and economic development and structural change An accompanying Student Solutions Manual containing the answers to selected exercises is available (978-0-691-14163-3/$24.95). See: http://press.princeton.edu/titles/8970.html. For Professors only: To access a complete solutions manual online, email us at: [email protected]

Sir Roy Harrod was one of the foremost economists of the twentieth century who made pioneering contributions in several branches of economics including: trade cycle theory; growth theory; trade theory; monetary economics; imperfect competition theory, and methodology. This volume arises out of a conference to celebrate the sixtieth anniversary of the publication of his book The Trade Cycle in 1936. After an introductory essay by Walter Eltis, a student of Harrod, this volume contains important essays on the interpretation of Harrod's work in the field of economic dynamics by Danial Besomi and Maurizio Pugno, and in the field of trade and growth by Tony Thirlwall, John McCombie and Luca Bendictis. Finally, Warren Young, in the process of writing Harrod's biography, uses correspondence between Harrod and Haberler to elucidate Harrod's views on trade theory, international monetary reform and inflation.

The NBER Macroeconomics Annual presents, extends, and applies pioneering work in macroeconomics and stimulates work by macroeconomists on important policy issues. Each paper in the Annual is followed by comments and discussion.

This dissertation consists of four essays on politics and economics. They employ a rich set of methodologies from applied microeconomics and analytical political science in attempts to shed lights on how information, identity, and institutions interact and shape behaviors, politics, and policies. Chapter 1, "The Limits and Side Effects of Persuasion: Political Endorsement and Trust in Scientific Expertise During COVID-19" examines how the American public reacts to politically relevant information from reputable independent sources and how the reaction affects their subsequent information acquisition. I leverage the scientific journal Nature's high-profile political endorsement during the COVID-19 pandemic and conduct a large-sample pre-registered online experiment, in which respondents are randomly assigned to read a short message summarizing the endorsement. The results show that, instead of changing their views about the candidate being endorsement, individuals adjust their assessments of the information source, namely Nature, and their willingness to acquire information from the source. This behavioral response depends crucially on the individuals' political predisposition. In particular, those whose political views are contradicted by the endorsement react by reporting lower levels of trust toward the source and turn down subsequent information provided by it. On the other hand, individuals whose political views are confirmed by the endorsement have the opposite response. I show that this dynamic has adverse and polarizing effects on public health information acquisition during COVID-19 and public confidence in the scientific community. The results from Chapter 1 demonstrate that differences in prior political views can lead to selective exposure to information sources. This tendency has the potential to magnify existing polarization of beliefs, as individuals disproportionately receive information from like-minded sources. In an age of political divisions, it is imperative to understand how policy-making under democratic institutions responds to selective information exposure in equilibrium. Chapter 2 sheds lights on this question from a theoretical perspective. While Chapter 1 investigates the origin of selective exposure to information, Chapter 2 "One Side, Now: Selective Exposure and Electoral Competition" examines the consequence of such selective exposure in an electoral setting. In this chapter, Avidit Acharya, Peter Buisseret, Adam Meirowitz, and I construct and analyze a formal model of election with imperfectly informed voters. Crucially, and consistent with the implications of Chapter 1, voters on both sides only acquire information from politically likely-minded sources, which systematically under-report information that is at odds with its audience's predisposition. We show that, relative to a benchmark where voters are fully informed by balanced sources, selective exposure reduces policy platform polarization. This counter-intuitive result does not depend qualitatively on the assumption that sophisticated voters correctly process slanted information. Relaxing Bayesian rationality reveals that the resulting "behavioral" equilibrium still exhibits lower levels of platform polarization relative to the full-exposure benchmark, even though voters are gullible and their beliefs are systematically manipulated by the biased information environment. This chapter shows the critical role of institutions, in this case elections, in conditioning the effects of information and behaviors on political and policy outcomes in non-obvious ways. Chapter 3 "Rage Against the Merchant: Automation and the Political Economy of Trade Protection" studies the interaction between institutions and information empirically in a concrete policy setting of enormous economic significance. In particular, it examines the making of protectionist trade policies in the U.S. Congress and links it to the labor market impacts of automation. Using an instrumental variable strategy, I find quantitative evidence suggesting trade and globalization are "scapegoated" for economic dislocations caused by labor-displacing technologies. Specifically, the chapter documents that House of Representative members representing labor markets more exposed to industrial robots vote in a more protectionist way on trade bills. Further analyses show this relationship is likely mediated by House members being pressured to become more protectionist, instead of the selection of protectionist candidates into office. In addition, the effect is stronger in districts poorly served by the local media market, suggesting mis-attribution and lacks of information are a key mechanism. To conclude Chapter 3, I discuss the connections and differences between my findings and that of existing studies on the electoral consequences of automation, which largely focus on European legislative elections and U.S. presidential elections. I argue that the institution of the U.S. Congress explains the differences and that my results call for a more nuanced interpretation of the existing findings centered on policies. The fourth and final chapter "The Opioid of the Masses? On the Political Economy of Nationalism and Redistribution in Autocracies" explores the role of social identity and how identity interacts with its institutional environment. Unlike the previous chapters, Chapter 4 focuses on autocracies. I analyze a simple model of endogenous identity formation in a stylized autocratic political economy, where distributive conflicts are resolved by the threat of revolution. I show that nationalism, the self-identification of citizens with the nation, reduces citizens' demand for redistribution and their willingness to challenge the autocratic elite. A structural econometric model is developed to demonstrate the empirical applications of the theory. I explore the equilibrium implications of this behavioral model by embedding it in a model of autocratic policy-making, which shows that the legitimizing effect of nationalism accelerates economic growth but increases income inequality. This unambiguous prediction is in sharp contrast with previous theoretical works on national identity and redistribution in democracies, which predict multiple equilibria with varying levels of output and inequality.

From an internationally acclaimed economist, a provocative call to jump-start economic growth by aggressively overhauling liberal democracy Around the world, people who are angry at stagnant wages and growing inequality have rebelled against established governments and turned to political extremes. Liberal democracy, history's greatest engine of growth, now struggles to overcome unprecedented economic headwinds--from aging populations to scarce resources to unsustainable debt burdens. Hobbled by short-term thinking and ideological dogma, democracies risk falling prey to nationalism and protectionism that will deliver declining living standards. In Edge of Chaos, Dambisa Moyo shows why economic growth is essential to global stability, and why liberal democracies are failing to produce it today. Rather than turning away from democracy, she argues, we must fundamentally reform it. Edge of Chaos presents a radical blueprint for change in order to galvanize growth and ensure the survival of democracy in the twenty-first century.