are ideas getting harder to find in many growth models economic growth arises from people creating ideas and the long run growth rate is the product of two terms the effective number of researchers and their research productivity we present a wide range of evidence from various industries products and firms showing that research effort is rising substantially while research productivity is declining sharply a good example is moore s law the number of researchers required today to achieve the famous doubling every two years of the density of computer chips is more than 18 times larger than the number required in the early 1970s across a broad range of case studies at various levels of dis aggregation we find that ideas and in particular the exponential growth they imply are getting harder and harder to find exponential growth results from the large increases in research effort that offset its declining productivity

a theory of ambiguity credibility and inflation under discretion and asymmetric information this paper develops a positive theory of credibility ambiguity and inflation under discretion and asymmetric information the monetary policymaker maximizes his own politically motivated objective function that is positively related to economic stimulation through monetary surprises and negatively related to monetary growth the relative importance he assigns to each target shifts stochastically through time his current preference trade off is known to him but not to the public when choosing the state contingent path of money growth for the present and the future the policymaker compares the benefits from current stimulation with the costs associated with higher future inflation expectations current monetary growth conveys information to the public about future money growth because there is persistence in the policymaker s objectives although expectations are rational information is imperfect because monetary control procedures are imprecise as a result the public cannot correctly distinguish persistent changes of emphasis on different policy objectives from transitory monetary control errors the public becomes aware of changes gradually by observing past monetary growth credibility is defined in terms of the speed with which the public recognizes changes in the objectives of the policymaker credibility is lower the noisier monetary control and the more stable the objectives of the policymaker looser monetary control and a higher degree of time preference on the part of the policymaker induce him to produce higher and more variable monetary growth when the policymaker is free to determine the accuracy of monetary control he does not always choose the most effective control available in spite of the fact that monetary surprises always have an expected value of zero the reason is that ambiguous control procedures enable the policymaker to generate positive surprises when he cares more than on average about economic stimulation he leaves the inevitable negative surprises for periods in which he cares more about inflation prevention this result provides an explanation for the fed s preference for ambiguity recently documented by goodfriend 1986 the policymaker is more likely to pick more ambiguous control procedures the more uncertain his objectives and the higher his time preference the paper also provides a theoretical underpinning for the well documented crosscountry positive correlation between the level and the variability of inflation

the baby boomers and the productivity slowdown abstract the entry of baby boomers into the labor force in the late 1960s and 1970s slowed growth for physical and human capital per worker because young workers have little of both thus the baby boom could have contributed to the productivity slowdown i build and calibrate a model a la huggett et al 2011 with exogenous population growth life expectancy retirement and tfp to evaluate this theory the baby boom alone accounts for 53 of the slowdown in the period 1964 69 18 in 1970 74 and 6 in 1975 79

how to get the snowball rolling and extend the franchise voting on the great reform act of 1832 this paper suggests a new approach to analyzing the causes of franchise extension based on a new dataset it provides a detailed econometric study of the great reform act of 1832 in the united kingdom the analysis yields four main results first modernization theory receives limited support second the reform enjoyed some measure of popular support third the threat of revolution had an asymmetric impact on the voting behavior of the pro reform whigs and the anti reform tories while the threat might have convinced reluctant reformers among the whig politicians and among their patrons to support the bill it seems to have hardened the resistance to reform among the tories fourth ideology played a critical role nevertheless it also appears that self interest and political expedience explained the votes of many members of parliament

how delegation improves commitment abstract mccallum 1995 american economic review papers and proceedings 85 2 207 211 conjectures that delegation merely relocates the commitment problem but does not solve it this holds if optimal ex ante policies do not change if additional information becomes available however with a flexibility credibility trade off delegation improves credibility

do markets care who chairs the central bank this paper assesses the effects of central bank governor appointments on financial market expectations of monetary policy to measure these effects we assemble a new dataset of appointment announcements from 15 countries and conduct an event study analysis on exchange rates bond yields and stock prices our main findings are threefold first exchange rates and bond yields display a statistically significant response to the announcement of a new governor especially when the appointee s identity was not anticipated in advance second the reactions are especially pronounced for central banks lacking either independence or a clear nominal anchor third new governors are not generally perceived to lack credibility there is no tendency for announcements to be associated with jumps in inflation expectations

workers of the world unite franchise extensions and the threat of revolution in europe 1820 1938 abstract we test the hypothesis that the extension of the voting franchise in europe was related to the threat of revolution we contend that international diffusion of regime contention and information about revolutionary events happening in neighboring countries generate the necessary variation in the perceived threat of revolution using two samples of european countries covering the period from 1820 to 1938 we find robust evidence which is consistent with the threat of revolution hypothesis we also find some evidence that war triggered suffrage reform

rules and discretion with noncoordinated monetary and fiscal policies the time inconsistency of optimal monetary policy is due to the effects of tax distortions thus the issue of how to improve upon the time consistent suboptimal monetary policy is related to that of the coordination of monetary and fiscal policy we present a model with three players the central bark the fiscal authority and wage setters in which distortionary taxes are explicitly modelled we show that binding commitments to monetary rules are not necessarily welfare improving if monetary and fiscal policy are not coordinated we also examine the effects of different degrees of independence of the central bank

the monetary policy of the european central bank the first six years of ecb monetary policy are examined using a general framework that allows central bankers to weight differently positive and negative deviations of inflation output and the interest rate from their reference values the empirical analysis on synthetic euro area data suggests that the objective of price stability is symmetric whereas the objectives of real activity and interest rate stabilizations are not output contractions imply larger policy responses than output expansions of the same size while movements in the interest rate are larger when the level of the interest rate is relatively high the hypothesis of m3 growth rate targeting is rejected

optimal central banker contracts and common agency this paper considers the contracting approach to centralbanking in a simple common agency model we suggest thatcentral banker contracts that do not consider the possibilityof more than one principal existing are incomplete contracts such incomplete contracts can be a poor form ofmonetary policy delegation under common agency we develop amodel with two principals society government and ageneric interest group whose objective conflicts withsociety s ex ante preferences by incorporating an inflationarybias we determine when the government offered orinterest group offered contract dominates the central banker sdecision the results largely depend on whether theinterest group offered contract is written in terms of outputor inflation

technological change and political turnover the democratizing effects of the green revolution in india can technological change contribute to political turnover influential theories suggest that technological change represents a form of creative destruction that can weaken incumbents and strengthen outsiders leading to political turnover this paper investigates a large scale historical natural experiment the impact of the green revolution on single party dominance in india drawing on a theoretical framework based on models of contests this paper argues that high yielding variety hyv crops strengthened the incentives and capacity of a politically excluded group in this case agricultural producers to seek greater political representation exploiting the timing of the introduction of hyv crops together with district level variation in suitability for the new crop technology instrumental variables analyses show that the green revolution played a pivotal role in the rise of agrarian opposition parties and decline of single party dominance the findings support theories linking technological change to political turnover with important implications for the political economy of democratization

inequality and democracy why inequality harms consolidation but does not affect democratization under what conditions do democracies emerge and consolidate recent theories suggest that inequality is among the leading determinants of both democratization and consolidation by contrast this article argues that inequality harms consolidation but has no net effect on democratization the author shows that the existing theories that link inequality to democratization suffer from serious limitations 1 they are useful only for understanding transitions from below and thus do not apply to many other transitions that is those from above 2 even for democratization from below their predictions are unlikely to hold since inequality actually has two opposite effects and 3 they ignore collective action problems which reduces their explanatory power however these objections do not affect the relationship between inequality and consolidation in particular while inequality has two opposite effects on the probability of transition to democracy it unambiguously increases the probability of transition away from democracy this article conducts the most comprehensive empirical test to date of the relationship between inequality and democracy it finds no support for the main democratization theories contrary to what they predict estimation suggests neither a monotonic negative nor an inverted u shaped relationship yet inequality increases the probability of backsliding from democracy to dictatorship

inequality and democratization a contractarian approach scholars continue to grapple with the question of the relationship between economic development and democratization prominent recent research has focused on the effects of economic inequality boix suggests that democratization is likelier when inequality is low whereas acemoglu and robinson argue that democratization is likelier when inequality is at middling levels both assume that democratization is a function of autocratic elites fear of the extent to which a future median voter would redistribute under different levels of inequality drawing on contractarian political theory the authors suggest that democratization is instead a function of demands by rising economic groups for protection from the state this alternative approach suggests that land and income inequality affect democratization differently autocracies with equal land distribution are indeed more likely to democratize but contrary to the conventional wisdom income inequality is more likely to promote democratization

crucial issues concerning central bank independence abstract this paper argues first that it is inappropriate to presume that central banks will in the absence of any tangible precommitment technology inevitably behave in a discretionary fashion that implies an inflationary bias furthermore there is no necessary tradeoff between flexibility and commitment second to the extent that the absence of any precommitment technology is nevertheless a problem it will apply to a consolidated central bank plus government entity as well as to the central bank alone thus contracts between governments and central banks do not overcome the motivation for dynamic inconsistency they merely relocate it several implications are discussed

inequality and personal income taxation the origins and effects of legislative malapportionment why does personal income taxation pit remain relatively low in many developing countries despite a period of democratic advancement and rapid economic growth this stylized fact is hard to reconcile with standard political economy models of taxation that expect democratic regimes to bring about redistribution in countries that suffer from high inequality this article argues that the details of political institutions are key to understand why pit remains low in many developing and unequal countries in particular we show how legislative malapportionment may prevent the use of personal income taxes as a major revenue source by skewing the distribution of political power across groups malapportionment is usually not exogenous but the result of design by those with political power at the transition or reform moment as such it depends on the structure of political and economic power in society based on a sample of more than 50 countries between 1990 and 2007 this article finds that a countries with

on the impossibility of central bank independence four decades of time and intellectual inconsistency the intellectual justification for modern central banking time inconsistency celebrated its fortieth anniversary in 2017 alongside the cambridge journal of economics however the key progeny of the time inconsistency literature central bank independence has fundamental flaws that have been thus far neglected in mainstream research in the first instance the argument for independence relies on a utilitarian rather than institutional analysis one that neglects the genesis of central banks and their relation to other institutions within a country second central bank independence neglects the complex interdependencies of the global monetary and financial system applying an institutional lens to the concept of central bank independence i conclude that independence fails under the reality of globalization as much as it does in a domestic context with central banks reliant on all manner of political institutions they are never really independent operationally or in terms of policy

patent protection innovation and technology transfer in a schumpeterian economy abstract this paper analyzes the cross country effects of intellectual property rights ipr protection on the relative wage innovation and technology transfer in a north south quality ladder model with innovative northern r d and adaptive southern r d the degree of ipr protection in two countries differs in terms of patent breadth which determines the markups of northern firms and their southern affiliates respectively in this model stronger ipr protection in the south leads to a permanent decrease in the north south wage gap a temporary increase in the northern innovation rate and a permanent increase in technology transfer by contrast stronger ipr protection in the north leads to a permanent increase in the north south wage gap ambiguous effects on the northern innovation rate and a permanent decrease in technology transfer finally we perform a quantitative analysis by calibrating the model to the us china data and the numerical results support these policy implications in addition to a welfare implication such that strengthening patent protection in one country leads to sizable welfare improvements in both countries

a new data set measuring income inequality this article presents a new data set on inequality in the distribution of income the authors explain the criteria they applied in selecting data on gini coefficients and on individual quintile groups income shares comparison of the new data set with existing compilations reveals that the data assembled here represent an improvement in quality and a significant expansion in coverage although differences in the definition of the underlying data might still affect inter temporal and international comparability based on this new data set the authors do not find a systematic link between growth and changes in aggregate inequality they do find a strong positive relationship between growth and reduction of poverty