rainfall financial development and remittances evidence from sub saharan africa we use annual variations in rainfall to examine the effects that exogenous transitory income shocks have on remittances in a panel of 41 sub saharan african countries during the period 1970 2007 our main finding is that on average rainfall shocks have an insignificant contemporaneous effect on remittances however the marginal effect is significantly decreasing in the share of domestic credit to gdp so much so that at high levels of credit to gdp rainfall shocks have a significant negative effect on remittances while at low levels of credit to gdp the effect of rainfall on remittances is significantly positive

economic dynamics in the malthusian era evidence from the 1609 spanish expulsion of the moriscos we investigate economic dynamics in the malthusian era using the 1609 expulsion of moriscos from spain sharp population declines in former morisco districts were accompanied by decreased output and increased per capita output while these short run results are consistent with standard malthusian predictions malthusian convergence was delayed up to 1786 in former morisco districts archival sources and historical accounts suggest extractive institutions and cultural differences may have contributed to delayed convergence in population and output per capita this historic episode provides an unusually rich setting to examine malthusian dynamics highlighting the potential for sustained differences in per capita output in the malthusian era

rain and the democratic window of opportunity according to the economic approach to political transitions negative transitory economic shocks can give rise to a window of opportunity for democratic change we examine this hypothesis using yearly rainfall variation over the 1980 2004 period in 41 sub saharan african countries we find that a 25 drop in rainfall increases the probability of a transition to democracy during the following two years by around 3 percentage points a 5 fall in income due to low rainfall raises the probability of democratization by around 7 percentage points we also find that rainfall does not affect transitions from democracy to autocracy

weather variations and international trade in this paper i investigate the effect of weather variations in the exporter and importer countries separately as well as a the difference between weather variations in both countries on bilateral trade flows the analysis is done at the country sectoral and product levels worldwide and over the 1992 2014 period i find a negative effect of temperature variations in the exporter country and in the difference between exporter and importer countries on bilateral trade at the country level at the product level both negative and positive effects arise but the negative effect of temperature dominates the temperature effects are on the agricultural and manufacturing sectors especially in the textile and metals sectors i show that possible channels are the impact of temperature on output and labour productivity the negative impacts are larger in exporter countries that are closer to the equator that have lower quality of institutions and that export to more remote countries if countries are able to adapt to climate change the long term effects of temperature variations should be lower than the contemporaneous effect nevertheless my results on the long term effects analysis do not support this hypothesis suggesting no or very low adaptation moreover the negative effect of temperature is persistent and cumulative through several years after the temperature shock concerning precipitation variation effects they are found mainly at the product level with the positive effect dominating for the affected products

quality matters the expulsion of professors and the consequences for phd student outcomes in nazi germany i investigate the effect of faculty quality on phd student outcomes to address the endogeneity of faculty quality i use exogenous variation provided by the expulsion of mathematics professors in nazi germany faculty quality is a very important determinant of short and long run phd student outcomes a one standard deviation increase in faculty quality increases the probability of publishing the dissertation in a top journal by 13 percentage points the probability of becoming a full professor by 10 percentage points the probability of having positive lifetime citations by 16 percentage points and the number of lifetime citations by 6 3

urban decline and durable housing urban decline is not the mirror image of growth and durable housing is the primary reason the nature of decline is so different this paper presents a model of urban decline with durable housing and verifies these implications of the model 1 city growth rates are skewed so that cities grow more quickly than they decline 2 urban decline is highly persistent 3 positive shocks increase population more than they increase housing prices 4 negative shocks decrease housing prices more than they decrease population 5 if housing prices are below construction costs then the city declines and 6 the combination of cheap housing and weak labor demand attracts individuals with low levels of human capital to declining cities

evidence on the political economy of the urbanization process urbanization and economic development go hand in hand as a country moves from a rural agricultural base to an urban industrial base this paper argues that urbanization per se occurs in response to the basic sector shift out of agriculture and government policies such as price controls and trade protection of industry affect the process only indirectly through their effect on sector composition however urban concentration the extent to which a country s urban resources are concentrated in one or two large cities as opposed to more evenly spread is much more directly affected by policies and politics the paper finds specifically that investments in inter regional infrastructure facilitates urban deconcentration away from primate to hinterland cities as does increasing democratization or increasing fiscal decentralization the findings move beyond establishing basic correlations in the data to trying to quantify causal effects in a panel framework with instrumental variables estimation

economic growth effects of alternative climate change impact channels in economic modeling despite increasing empirical evidence of strong links between climate and economic growth there is no established model to describe the dynamics of how different types of climate shocks affect growth patterns here we present the first comprehensive comparative analysis of the long term dynamics of one time temporary climate shocks on production factors and factor productivity respectively in a ramsey type growth model damages acting directly on production factors allow us to study dynamic effects on factor allocation savings and economic growth we find that the persistence of impacts on economic activity is smallest for climate shocks directly impacting output and successively increases for direct damages on capital loss of labor and productivity shocks related to different responses in savings rates and factor specific growth recurring shocks lead to large welfare effects and long term growth effects directly linked to the persistence of individual shocks endogenous savings and shock anticipation both have adaptive effects but do not eliminate differences between impact channels or significantly lower the dissipation time accounting for endogenous growth mechanisms increases the effects we also find strong effects on income shares important for distributional implications this work fosters conceptual understanding of impact dynamics in growth models opening options for links to empirics

disease and development the effect of life expectancy on economic growth we exploit the major international health improvements from the 1940s to estimate the effect of life expectancy on economic performance we construct predicted mortality using preintervention mortality rates from various diseases and dates of global interventions predicted mortality has a large impact on changes in life expectancy starting in 1940 but no effect before 1940 using predicted mortality as an instrument we find that a 1 percent increase in life expectancy leads to a 1 7 2 percent increase in population life expectancy has a much smaller effect on total gdp however consequently there is no evidence that the large increase in life expectancy raised income per capita

the global spatial distribution of economic activity nature history and the role of trade we explore the role of natural characteristics in determining the worldwide spatial distribution of economic activity as proxied by lights at night observed across 240 000 grid cells a parsimonious set of 24 physical geography attributes explains 47 of worldwide variation and 35 of within country variation in lights we divide geographic characteristics into two groups those primarily important for agriculture and those primarily important for trade and confront a puzzle in examining within country variation in lights among countries that developed early agricultural variables incrementally explain over 6 times as much variation in lights as do trade variables while among late developing countries the ratio is only about 1 5 even though the latter group is far more dependent on agriculture correspondingly the marginal effects of agricultural variables as a group on lights are larger in absolute value and those for trade smaller for early developers than for late developers we show that this apparent puzzle is explained by persistence and the differential timing of technological shocks in the two sets of countries for early developers structural transformation due to rising agricultural productivity began when transport costs were still high so cities were localized in agricultural regions when transport costs fell these agglomerations persisted in late developing countries transport costs fell before structural transformation to exploit urban scale economies manufacturing agglomerated in relatively few often coastal locations consistent with this explanation countries that developed earlier are more spatially equal in their distribution of education and economic activity than late developers

wage and labor supply effects of illness in cote d ivoire and ghana instrumental variable estimates for days disabled abstract sickness should make individuals less productive but there are problems in measuring this effect first how is adult morbidity measured in a household survey second how is the impact or morbidity on productivity inferred if earning is partly used to improve health self reported functional activity limitation due to illness is considered an indicator of morbidity for wage earners and self employed people to deal with both the measurement and joint determination problems an instrumental variable estimation approach is used where local food prices and health services instrument for disability days that reduce wages by at least 10 and hours by 3 or more

temperature shocks and welfare costs abstract this paper examines the welfare implications of rising temperatures using a standard var we empirically show that a temperature shock has a sizable negative and statistically significant impact on tfp output and labor productivity we rationalize these findings within a production economy featuring long run temperature risk in the model macro aggregates drop in response to a temperature shock consistent with the novel evidence in the data such adverse effects are long lasting over a 50 year horizon a one standard deviation temperature shock lowers both cumulative output and labor productivity growth by 1 4 percentage points based on the model we also show that temperature risk is associated with non negligible welfare costs which amount to 18 4 of the agent s lifetime utility and grow exponentially with the size of the impact of temperature on tfp finally we show that faster adaptation to temperature shocks results in lower welfare costs these welfare benefits become substantially higher in the presence of permanent improvements in the speed of adaptation

wealth weather risk and the composition and profitability of agricultural investments despite the growing evidence that farmers in low income environments are risk averse there has been little empirical evidence on the importance of risk in shaping the actual allocation of production resources among farmers differentiated by wealth the authors use panel data on investments in rural india to examine how the composition of productive and nonproductive asset holdings varies across farmers with different levels of total wealth and across farmers facing different degrees of weather risk income variability is a prominent feature of the experience of rural agents in low income countries the authors report evidence based on measures of rainfall variability that the agricultural investment portfolio behavior of farmers in such settings reflects risk aversion due evidently to limitations on consumption soothing mechanisms such as crop insurance or credit markets the authors results suggest that uninsured weather risk is a significant cause of lower efficiency and lower average incomes a one standard deviation decrease in weather risk measured by the standard deviation of the timing of the rainy season would raise average profits by up to 35 percent among farmers in the lowest wealth quartile moreover rainfall variability induces a more unequal distribution of average incomes for a given distribution of wealth wealthier farmers are willing to absorb significant risk without giving up profits to reduce production risk smaller farmers have to invest their limited wealth in ways that reduce their exposure to risk at the cost of lower profit rates the authors found that at high levels of rainfall variability differences in rates of profit per unit of agricultural assets were similar across classes of wealth but over the sample range of rainfall variability these rates of profit were always higher for the poorer farmers than for the wealthier ones suggesting that the disadvantages of small farmers in risk diffusion are more than offset by their labor cost advantage

what do we learn from the weather the new climate economy literature a rapidly growing body of research applies panel methods to examine how temperature precipitation and windstorms influence economic outcomes these studies focus on changes in weather realizations over time within a given spatial area and demonstrate impacts on agricultural output industrial output labor productivity energy demand health conflict and economic growth among other outcomes by harnessing exogenous variation over time within a given spatial unit these studies help credibly identify i the breadth of channels linking weather and the economy ii heterogeneous treatment effects across different types of locations and iii nonlinear effects of weather variables this paper reviews the new literature with two purposes first we summarize recent work providing a guide to its methodologies datasets and findings second we consider applications of the new literature including insights for the damage function within models that seek to assess the potential economic effects of future climate change jel c51 d72 o13 q51 q54

how deep are the roots of economic development 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

venture capital and the macroeconomy i develop a model of venture capital vc intermediation that quantitatively explains central empirical facts about vc activity and can evaluate its macroeconomic relevance the impact of vc backed innovations is significantly larger than suggested by observed aggregate venture exit valuations even after accounting for large exposures to systematic and uninsurable idiosyncratic risks the risk properties of venture capital play a quantitatively important role in both explaining empirical regularities and shaping the value of ventures contributions to economic growth the model is analytically tractable and yields exact solutions despite the presence of matching frictions imperfect risk sharing and endogenous growth received january 16 2018 editorial decision november 7 2018 by editor stijn van nieuwerburgh

mortality decline human capital investment and economic growth abstract we examine the role of increased life expectancy in raising human capital investment during the process of economic growth we develop a continuous time overlapping generations model in which individuals make optimal schooling investment choices in the face of a constant probability of death we present analytic results followed by results from a calibrated version of the model using realistic estimates of the return to schooling mortality decline produces economically significant increases in schooling and consumption allowing schooling to vary endogenously produces a much larger response of consumption and capital to mortality decline than is observed when schooling is held fixed

jealousy and equilibrium overconsumption the idea that the happiness of an individual depends upon the consumption of others is widely viewed as an important feature of our shared social existence recent research in finance has used this idea through consumption externalities to explore asset pricing anomalies consumption externalities potentially break the link between pareto optimality and competitive equilibria and open the door for beneficial government intervention e g lars ljungqvist and harald uhlig 2000 in this paper we delineate two effects that a consumption externality may have an increase in aggregate consumption may a raise the marginal utility of individual consumption relative to leisure and or b lower an individual s utility level we refer to a as keeping up with the joneses henceforth kuj following jordi gali 1994 and we refer to b as jealousy jealousy is a distinct concept from kuj under kuj an individual derives greater utility from additional own consumption relative to leisure when others consume more at the same time higher per capita consumption holding fixed individual consumption can trigger either jealousy so that individual utility falls or admiration so that individual utility rises in section i of this paper we show that jealousy implies that the laissez faire equilibrium consumption level is greater than the optimal level whether preferences exhibit kuj is not necessary for this main result intuitively in the presence of jealousy consumption is similar to pollution overpollution exists because individuals do not take into account the cost of polluting on others not because an increase in economywide pollution makes the return to individual polluting higher similarly overconsumption exists because individuals do not take into account the negative effect of own consumption on jealous others things go in the opposite direction when individuals are admiring in section ii we consider a functional form that encompasses several existing models we show that jealousy determines the optimal tax to correct overconsumption and that kuj is mainly important for asset pricing

the development effects of the extractive colonial economy the dutch cultivation system in java colonial powers typically organized economic activity in the colonies to maximize their economic returns while the literature has emphasized long run negative economic impacts via institutional quality the changes in economic organization implemented to spur production historically could also directly influence economic organization in the long run exerting countervailing effects we examine these in the context of the dutch cultivation system the integrated industrial and agricultural system for producing sugar that formed the core of the dutch colonial enterprise in 19th century java we show that areas close to where the dutch established sugar factories in the mid 19th century are today more industrialized have better infrastructure are more educated and are richer than nearby counterfactual locations that would have been similarly suitable for colonial sugar factories we also show using a spatial regression discontinuity design on the catchment areas around each factory that villages forced to grow sugar cane have more village owned land and also have more schools and substantially higher education levels both historically and today the results suggest that the economic structures implemented by colonizers to facilitate production can continue to promote economic activity in the long run and we discuss the contexts where such effects are most likely to be important

disease and development in historical perspective health conditions and disease environments are important for economic outcomes this paper argues that the main impact of disease environments on the economic development of nations is not due to the direct effect of health conditions on income but rather because of their indirect effect via institutions health does affect income directly but this can explain only a small fraction of today s differences in per capita income in contrast when previously isolated populations came into contact during the period of european colonial expansion differences in disease environments had a major impact on the path of institutional development and consequently first order consequences for economic growth jel i12 o12

cities skills and regional change glaeser e l ponzetto g a m and tobio k cities skills and regional change regional studies one approach to urban areas emphasizes the existence of certain immutable relationships such as zipf s or gibrat s law an alternative view is that urban change reflects individual responses to changing tastes or technologies this paper examines almost 200 years of regional change in the united states and finds that few if any growth relationships remain constant including gibrat s law education does a reasonable job of explaining urban resilience in recent decades but it does not seem to predict county growth a century ago after reviewing this evidence a simple model of regional change is presented and estimated where education increases the level of entrepreneurship human capital spillovers occur at the city level because skilled workers produce more product varieties and thereby increase labour demand it is found that skills are associated with growth in productivity or entrepreneurship not

the effect of ambient temperature shocks during conception and early pregnancy on later life outcomes abstract a large body of research has recently shown that early life or in utero shocks especially climatic shocks may affect long run human capital outcomes most of these effects are assumed to be biological including poor nutrition during critical windows of fetal development or through increased maternal stress however in addition to these biological effects climatic conditions at the time of conception may also cause changes in parental behavior not only affecting the mix of parents who conceive but also the characteristics of the children once born this paper explores whether increases in ambient temperature at the time of conception while in utero or after birth affect educational and health outcomes as adults using census and demographic and health survey data from sub saharan africa we show that individuals conceived during high temperatures have higher educational attainment and literacy in addition we find evidence of temperature effects at other times in utero especially during the first trimester we then explore the biological and behavioral mechanisms through which this effect may occur including heat induced changes in sexual behavior differences in parental characteristics and intensified fetal selection we conclude that fetal selection is the most likely mechanism driving our result

how tournament incentives affect asset markets a comparison between winner take all tournaments and elimination contests abstract we investigate the impact of investment managers tournament incentives on investment strategies and market efficiency distinguishing between winner take all tournaments wta where a minority wins and elimination contests ec where a majority wins theoretically we show that investment managers play heterogeneous strategies in wta and homogeneous strategies in ec and markets are more prone to mispricing in wta than in ec experimentally we find that investment managers play more heterogeneous strategies in wta than in ec but this does not trigger significant differences in prices moreover prices in wta and ec do not differ significantly from markets composed of linearly incentivized subjects

diversification as a public good community effects in portfolio choice within a rational general equilibrium model in which agents care only about personal consumption we consider a setting in which due to borrowing constraints individuals endowed with local resources underparticipate in financial markets as a result investors compete for local resources through their portfolio choices even with complete financial markets and no aggregate risk agents may herd into risky portfolios this yields a pareto dominated outcome as agents introduce community risk unrelated to fundamentals moreover if some agents are behaviorally biased or cannot completely diversify their holdings rational agents may choose more extreme portfolios and amplify the effect

legal origins and female hiv more than one half of all people living with hiv are women and 80 percent of all hiv positive women in the world live in sub saharan africa this paper demonstrates that the legal origins of these formerly colonized countries significantly determine current day female hiv rates in particular female hiv rates are significantly higher in common law sub saharan african countries compared to civil law ones this paper explains this relationship by focusing on differences in female property rights under the two codes of law in sub saharan africa common law is associated with weaker female marital property laws as a result women in these common law countries have lower bargaining power within the household and are less able to negotiate safe sex practices and are thus more vulnerable to hiv compared to their civil law counterparts exploiting the fact that some ethnic groups in sub saharan africa cross country borders with different legal systems we are able to include ethnicity fixed effects into a regression discontinuity approach this allows us to control for a large set of cultural geographical and environmental factors that could be confounding the estimates the results of this paper are consistent with gender inequality the feminization of aids explaining much of its prevalence in sub saharan africa

wealth and health at the base of the pyramid modelling trade offs and complementarities for fast moving dairy product case abstract this paper models the localized base of the pyramid bop supply and demand chain of a fast moving dairy product within its social and business environment for identifying the effects of various pricing strategies on wealth and health of the poor population of bangladesh the joint venture of the grameen bank and danone gd in bangladesh is a showcase of integrative bop projects it produces fortified yoghurt in a micro plant and distributes it through micro entrepreneurs following a strictly localized approach the objective of this bop project is twofold 1 integrating as many people as possible into productive processes and paying decent prices wages and commissions wealth and 2 regularly serving as many people as possible with fortified yoghurt health by means of dynamic simulation we analyse how volatility in raw material prices affects the economic viability of the business model and hence both objectives the gd case provides the motivation as well as empirical data for the presented research and has been used for model validation additionally we use further literature sources our results show the outstanding importance of sales effectiveness for buffering against negative consumer reaction to sudden price increases sales effectiveness aggregates various performance factors regarding product distribution and perceived product quality and value in this respect awareness raising campaigns by governmental and civil society organizations as well as changes regarding distribution mode and selection of distributors may enhance sales effectiveness

technological innovation and real investment booms and busts abstract we investigate why new high risk technologies can attract excessive and often unprofitable investment we develop an equilibrium model in which rational risk averse agents overinvest in a risky technology possibly to the point that its expected return is negative overinvestment results from relative wealth concerns which arise endogenously from the imperfect tradability of future endowments competition over future consumption leads to an indirect utility for wealth with keeping up with the joneses properties that can induce herding because overinvestment increases with the risk of the technology our model can explain why new risky technological innovations may promote investment bubbles

the role of ports in the making of major cities self agglomeration and hub effect this paper proposes an evolutionary model of spatial economic development in which agglomeration economies and the hub effect of transport nodes interplay in the making of major cities the model explains the irreversibility of spatial economic development such as the continuing prosperity of port cities even after their initial advantage of water access had become irrelevant it is also shown that in order to decentralize industries from the core region to a periphery region a temporary protection of industries in the periphery by worsening the transport connection with the core for a short period of time may be desirable

chronic disease burden and the interaction of education fertility and growth abstract this study considers the eradication of hookworm disease from the american south circa 1910 as a test of the quantity quality q q framework of fertility eradication was principally a shock to the price of quality because of three factors hookworm i depresses the return to human capital investment ii had a very low case fatality rate and iii had negligible prevalence among adults consistent with the q q model we find a significant decline in fertility associated with eradication

malaria suitability urbanization and persistence evidence from china over more than 2000 years abstract we show that the climatic potential for plasmodium falciparum malaria transmission constituted a locational fundamental that influenced the spatial distribution of urbanization since the early start of the southward expansion of the han chinese around 200 bce this effect is still detectable in today s distribution of urbanization and economic activity even though the risk of malaria falciparum has been successfully eliminated we do not find any indication of convergence between high and low malaria potential regions after eradication our identification strategy relies on a climate based measure of plasmodium falciparum malaria transmission intensity which is fitted to experimental data on mosquito and parasite development from laboratory studies this measure is exogenous with respect to human population densities

social structure and development a legacy of the holocaust in russia we document a statistical association between the severity of the persecution displacement and mass murder of jews by the nazis during world war ii and long run economic and political outcomes within russia cities that experienced the holocaust most intensely have grown less and both cities and administrative districts oblasts where the holocaust had the largest impact have worse economic and political outcomes since the collapse of the soviet union we provide evidence that the lasting impact of the holocaust may be attributable to a permanent change it induced in the social structure across different regions of russia

weather shocks and agricultural commercialization in colonial tropical africa did cash crops alleviate social distress a rapidly growing body of research examines the ways in which climatic variability influences economic and societal outcomes this study investigates how weather shocks triggered social distress in british colonial africa further it intervenes in a long standing and unsettled debate concerning the effects of agricultural commercialization on the abilities of rural communities to cope with exogenous shocks we collect qualitative evidence from annual administrative records to explore the mechanisms linking weather extremes to harvest failures and social distress we also conduct econometric testing on a novel panel dataset of 143 administrative districts across west south central and east africa in the interwar era 1920 39 our findings are twofold first we find robust evidence that rainfall anomalies both drought and excessive precipitation are associated with spikes in imprisonment our proxy for social distress we argue that the key causal pathway is the loss of agricultural income which results in higher imprisonment for theft unrest debt and tax default second we find that the impact of weather shocks on distress is partially mitigated by the cultivation of export crops our findings suggest that even in the british colonial context smallholder export crop cultivation led to higher private incomes as well as greater public investment our findings speak to a topic of considerable urgency today as the process of global climate change accelerates generating more severe and unpredictable climatic extremes an increased understanding and identification of adaptive and mitigating factors would assist in targeting policy interventions and designing adaptive institutions to support vulnerable rural societies

disease and development evidence from hookworm eradication in the american south this study evaluates the economic consequences of the successful eradication of hookworm disease from the american south the hookworm eradication campaign c 1910 began soon after i the discovery that a variety of health problems among southerners could be attributed to the disease and ii the donation by john d rockefeller of a substantial sum to the effort the rockefeller sanitary commission rsc surveyed infection rates in the affected areas eleven southern states and found that an average of forty percent of school aged children were infected with hookworm the rsc then sponsored treatment and education campaigns across the region follow up studies indicate that this campaign substantially reduced hookworm disease almost immediately the sudden introduction of this treatment combines with the cross area differences in pre treatment infection rates to form the basis of the identification strategy areas with higher levels of hookworm infection prior to the rsc experienced greater increases in school enrollment attendance and literacy after the intervention this result is robust to controlling for a variety of alternative factors including differential trends across areas changing crop prices shifts in certain educational and health policies and the effect of malaria eradication no significant contemporaneous results are found for adults who should have benefited less from the intervention owing to their substantially lower prior infection rates a long term follow up of affected cohorts indicates a substantial gain in income that coincided with exposure to hookworm eradication i also find evidence that eradication increased the return to schooling

the impact of global warming on agriculture a ricardian analysis reply we measure the economic impact of climate on land prices using cross sectional data on climate farmland prices and other economic and geophysical data for almost 3 000 counties in the united states we find that higher temperatures in all seasons except autumn reduce average farm values while more precipitation outside of autumn increases farm values applying the model to a global warming scenario shows a significantly lower estimated impact of global warming on u s agriculture than the traditional production function approach and in one case suggests that even without co sub 2 fertilization global warming may have economic benefits for agriculture 16 refs 5 figs 5 tabs

the gift of the dying the tragedy of aids and the welfare of future african generations this paper simulates the impact of the aids epidemic on future living standards in south africa i emphasize two competing effects on the one hand the epidemic is likely to have a detrimental impact on the human capital accumulation of orphaned children on the other hand widespread community infection lowers fertility both directly through a reduction in the willingness to engage in unprotected sexual activity and indirectly by increasing the scarcity of labor and the value of a woman s time i find that even with the most pessimistic assumptions concerning reductions in educational attainment the fertility effect dominates the aids epidemic on net enhances the future per capita consumption possibilities of the south african economy

does rainfall matter for economic growth evidence from global sub national data 1990 2014 much micro econometric evidence suggests that precipitation has wide ranging impacts on vital economic indicators such as agricultural yields human capital and even conflict and yet paradoxically most macro econometric evidence especially in the climate economy literature finds that precipitation has no robust and significant impact on various measures of aggregate economic output this paper argues that spatial aggregation of weather at the country level explains this result the paper uses annual subnational gross domestic product data to show a concave relationship between precipitation and local gross domestic product growth between 1990 and 2014 it then demonstrates that when the data are aggregated at larger spatial scales the impact decreases and eventually vanishes the impact of precipitation on aggregate economic activity is predominantly felt in developing countries it is insignificant in developed countries agriculture is found to be the dominant pathway the results have significant consequences for measuring the economic impacts of climate change

the permanent effects of transportation revolutions in poor countries evidence from africa we exploit the construction and eventual demise of the colonial railroads in africa to study the impact of transportation investments in poor countries using ghana and sub saharan africa as a whole we assembled new data on railroads and cities spanning over one century to show that i railroads had large effects on the spatial distribution and aggregate level of economic activity during the colonial period as they constituted a transportation revolution in a context where no modern transportation technology previously existed ii these effects have persisted to date although railroads collapsed and road networks expanded considerably in the post independence period the analysis contributes to our understanding of the heterogeneous impact of transportation investments it shows that initial investments may have a large effect in poor countries with basic infrastructure as the countries develop increasing returns may then solidify their spatial distribution and subsequent investments may have a smaller effect on local economic development

difference in interim performance and risk taking with short sale constraints abstract absent much theory empirical works often rely on the following informal reasoning when looking for evidence of a mutual fund tournament if there is a tournament interim winners have incentives to decrease their portfolio volatility as they attempt to protect their lead while interim losers are expected to increase their volatility so as to catch up with winners we consider a rational model of a mutual fund tournament in the presence of short sale constraints and find the opposite interim winners choose more volatile portfolios in equilibrium than interim losers several empirical works present evidence consistent with our model however based on the above informal argument they appear to conclude against the tournament behavior we argue that this conclusion is unwarranted we also demonstrate that tournament incentives lead to differences in interim performance for otherwise identical managers and that mid year trading volume is inversely related to mid year stock return

spatial wage disparities sorting matters spatial wage disparities can result from spatial differences in the skill composition of the workforce in non human endowments and in local interactions to distinguish between these explanations we estimate a model of wage determination across local labour markets using a very large panel of french workers we control for worker characteristics worker fixed effects industry fixed effects and the characteristics of the local labour market our findings suggest that individual skills account for a large fraction of existing spatial wage disparities with strong evidence of spatial sorting by skills interaction effects are mostly driven by the local density of employment not controlling for worker heterogeneity leads to very biased estimates of interaction effects endowments only appear to play a small role

speculative profits innovation and growth when technological change affects the prices of tradeable assets innovators can obtain speculative profits by exploiting their inside information as to the occurrence of innovations we propose a tractable model of endogenous growth that formalizes this argument originally due to hirshleifer 1971 we then use the model to assess two claims advanced by hirshleifer namely that speculative profits can generate excessive investment in r d when they add to monopoly rents guaranteed by patent protection or else even in a perfectly competitive economy the analysis confirms the first claim but casts doubts on the second one jel o30 o40

risk sharing versus low cost credit systems for international development low cost credit programs in developing countries have failed to achieve agricultural technology adoption goals this research attributes the failure to the inabiiity of poor farmers to bear the combined business and financial risks p sed ly adopting new technologies and develops proposals for the design of credit programs that reduce these risks agronomic and socioeconomic data are combined through simulation and mathematical programming to analyze problems of decision making under risk for developing countries the results will assist iii the design of new rural financial institutions conducive to the adoption of new production technologies by subsistence

forced coexistence and economic development evidence from native american reservations there are large differences in economic development across native american reservations today this paper asks whether these differences can be in part explained by the forced integration of historically autonomous sub tribal bands in the 19th century to measure forced integration i combine anthropological data on intra tribal political integration in pre reservation times with historical information on the constituent bands of each reservation exploring variation in how politically integrated tribes were before reservations and variation in how politically integrated reservations were at the time of their formation i find that forced integration lowers per capita incomes today by about 30 percent to account for potential selection into forced integration i exploit historical mining rushes as a source of exogenous variation in the government s incentive to combine bands onto reservations the iv strategy confirms the baseline results i also provide quantitative evidence on the channels through which forced integration affects incomes today

dynamics of biofuel stock prices a bayesian approach we use bayesian markov chain monte carlo methods to investigate the linkage between the volatility of ethanol security prices and the uncertainty surrounding the profitability of ethanol production and the price variations of non ethanol energy securities the joint evolution of return and volatility is modeled as a stochastic process that incorporates jumps in both return and volatility while a strong and significant correlation is found between the volatility of ethanol securities and profit uncertainty from june 2005 to july 2008 the dynamic pattern of ethanol stock volatility is strikingly similar to that of the s p 500 energy sector index in the more recent period our evidence lends support to the findings in the literature on rational learning from uncertainty in determining the equity price and volatility during the adoption and development of a technological innovation

why has africa grown slowly we distinguish between policy and destiny explanations of africa s slow growth during the past three decades policies were poor high export taxation and inefficient public service delivery and destiny was adverse landlocked tropical locations and terms of trade deterioration during the 1990s africa s economic policies improved although with considerable variation both between countries and between policies trade and exchange rate policies improved much more than service delivery thus the differing explanations of past slow growth imply different predictions for growth in the coming decade we argue that poor public economic services are likely to be the binding constraint

the evolution of human life expectancy and intelligence in hunter gatherer economies the economics of hunting and gathering must have driven the biological evolution of human characteristics since hunter gatherer societies prevailed for the two million years of human history these societies feature huge intergenerational resource flows suggesting that these resource flows should replace fertility as the key demographic consideration it is then theoretically expected that life expectancy and brain size would increase simultaneously as apparently occurred during our evolutionary history the brain here is considered as a direct form of bodily investment but also crucially as facilitating further indirect investment by means of learning by doing

rural credit markets and institutions in developing countries lessons for policy analysis from practice and modern theory this article presents evidence of the failure of government intervention in rural credit markets of ldcs in the past three decades it then shows how lessons for policy analysis can be drawn from modern theory particularly those theories focussing on credit rationing in competitive markets and interlinking of credit contracts with labor and land contracts the article outlines the policy implications of these theories and finds them insufficient to account for the empirical evidence it contends that a more systematic and rigorous analysis of institutions and institutional environments is essential for understanding and implementing effective policy reforms of rural credit markets it presents suggestions for undertaking such an analysis

malthus living in a slum urban concentration infrastructure and economic growth abstract the link between urban concentration primacy and economic growth at country level is not straightforward as there are benefits as well as costs associated with urban primacy recent empirical evidence suggests a differential negative effect of concentration in sub saharan africa compared to the rest of the world this paper revisits the literature on urban concentration and economic growth to shed some light on these recent results the main contribution of the paper is to show how differentiated effects of urban primacy on economic growth can be accounted for by considering a role for the quality of the urban environment in terms of urban infrastructure the role of urban infrastructure is found to be robust to a long list of controls different specifications different estimation techniques and potential bias from simultaneity and measurement error

history path dependence and development evidence from colonial railroads settlers and cities in kenya little is known about the extent and forces of path dependence in developing countries colonial era railroad construction in kenya provides a natural experiment to study the emergence and persistence of spatial equilibrium data spanning over one century shows that railroads determined the location of european settlers asian traders and the main cities at independence europeans then left asians departed and railroads declined in the immediate post independence period constituting local shocks to physical and human capital yet the colonial cities persisted we test four explanations for path dependence based on institutional persistence technological change sunk investments and spatial coordination failures

relative wealth concerns and financial bubbles we present a rational general equilibrium model that highlights the fact that relative wealth concerns can play a role in explaining financial bubbles we consider a finite horizon overlapping generations model in which agents care only about their consumption though the horizon is finite competition over future investment opportunities makes agents utilities dependent on the wealth of their cohort and induces relative wealth concerns agents herd into risky securities and drive down their expected return even though the bubble is likely to burst and lead to a substantial loss agents relative wealth concerns make them afraid to trade against the crowd

mortality reductions educational attainment and fertility choice this paper develops a model where reductions in mortality are the main force behind economic development the model generates a pattern of changes similar to the demographic transition where gains in life expectancy at birth are followed by reductions in fertility and increases in the rate of human capital accumulation the onset of the transition is characterized by a critical level of life expectancy at birth which marks the movement of the economy from a malthusian equilibrium to an equilibrium with investments in human capital and the possibility of long run growth

supply and demand for livestock credit in sub saharan africa lessons for designing new credit schemes abstract based on analysis of credit supply in ethiopia kenya uganda and nigeria it is shown that public credit institutions do not have sufficient funds to meet the demand for livestock credit and cannot mobilize savings from their clients or other commercial sources for one reason or another in addition available credit does not reach those who need it the most and with whom it could have the greatest impact due to the application of inappropriate screening procedures and criteria to determine creditworthiness the analysis of demand based on borrowing and nonborrowing sample households using improved dairy technology it is shown that not all borrowers borrowed due to liquidity constraint while some borrowers and some nonborrowers had liquidity constraint but did not have access to adequate credit logistic regression analysis show that sex and education of the household head training in dairy prevalence of outstanding loan and the number of improved cattle on the farm had significant influence on both borrowing and liquidity status of a household though the degree and direction of influence were not always the same in each study country based on the findings it is suggested that combining public and commercial finance could solve the problem of inadequate credit supply while inventory finance to community level input suppliers and service providers might help in getting credit to worthy and needy smallholders at lower cost than providing credit to smallholders directly

economic growth size of the agricultural sector and urbanization in africa this paper uses variations in international commodity prices and rainfall to construct instrumental variables estimates of the within country effect that changes in the size of the agricultural sector and gdp per capita growth have on the urbanization rate for a panel of 41 african countries during the period 1960 2007 the paper s three main findings are that i decreases in the share of agricultural value added lead to a significant increase in the urbanization rate ii conditional on changes in the share of agricultural value added gdp per capita growth does not significantly affect the urbanization rate iii increases in the urbanization rate had a significant negative average effect on gdp per capita growth

exogenous volatility and the size of government in developing countries this paper presents instrumental variables estimates of the effects of gdp per capita volatility on the size of government we show that for a panel of 157 countries spanning more than half a century rainfall volatility has a significant positive effect on gdp per capita volatility in countries with above median temperatures in these countries rainfall volatility has also a significant positive reduced form effect on the gdp share of government there is no significant reduced form effect in the sample of countries with below median temperatures where rainfall volatility has no significant effect on gdp per capita volatility using rainfall volatility as an instrumental variable in the sample of countries with above median temperatures yields that greater gdp per capita volatility leads to a significantly higher gdp share of government

climatic factors as determinants of international migration we examine environmental change as a potential determinant of international migration we distinguish between unexpected short run factors captured by natural disasters as well as long run climate change and climate variability captured by deviations and volatilities of temperatures and rainfall from and around their long run averages starting from a simple neo classical model we use a panel dataset of bilateral migration flows for the period 1960 2000 that allows us to control for numerous time varying and time invariant factors we find no direct impact of climatic change on international migration across our entire sample these results are robust when conditioning on characteristics of origin countries as well as when further considering migrants returning home and the potential endogeneity of our network variable in contrast there is evidence of indirect effects of environmental factors going through wages we further find strong evidence that natural disasters beget greater flows of migrants to urban environs

diseases infection dynamics and development abstract the relationship between health and development is a subject of ongoing debate this paper contributes to the debate by proposing a general equilibrium theory of infectious disease transmission prevention investment and rational behavior diseases cause premature death labor productivity loss and lower quality of life higher disease prevalence lowers the average saving investment propensity the model offers two insights first infectious disease can plausibly generate an unconventional growth trap where income alone cannot push an economy out of underdevelopment second even when countries converge to the same balanced growth path the disease ecology significantly impairs the pace of economic development

trade institution quality and income inequality summary we examine the effect of trade on income inequality in small developing countries we use two well accepted trade cost variables for identification one is based on baltic dry index and another is commodities price index our main finding is that trade leads to a significant reduction increase in income inequality in autocracies democracies to explain such different effects we provide supporting evidence that autocracies export more primary commodities and may follow the stolper samuelson theorem in ho framework while democracies active in manufacturing outsourcing may follow feenstra and hanson 1996 task model

cross country disparity in agricultural productivity quantifying the role of modern seed adoption inequality of agricultural labour productivity across the developing world has increased substantially over the past 40 years this article asks to what extent did the diffusion of green revolution seed varieties contribute to increasing agricultural labour productivity disparity across the developing countries we find that 22 per cent of cross country variation in agricultural labour productivity can be attributed to the diffusion of high yielding seed varieties across countries and that the impact of such diffusion differed significantly across regions we discuss the implications of these findings for policy directed at increasing agricultural labour productivity in the developing world

explaining african economic performance africa has had slow growth and a massive exodus of capital in many respects it has been the most capital hostile region we review and interpret the aggregate level and microeconomic literatures to identify the key explanations for this performance there is a reasonable correspondence of the two sets of evidence pointing to four factors as being important these are a lack of openness to international trade a high risk environment a low level of social capital and poor infrastructure these problems are to a substantial extent attributable to government behaviour and the paper includes a review of the political economy literature which addresses that behaviour

credit constraints and smallholder dairy production in the east african highlands application of a switching regression model abstract accurate assessment of farmers credit constraint condition is important in order to understand the circumstances under which credit would have its greatest impact in this study a switching regression model was used to determine the impact of credit on smallholder dairy farms in the east african highlands using farm level data from ethiopia and kenya farmers were classified as credit constrained or credit non constrained based on their responses from the farm level surveys no consistent relationship was found between farmers credit constraint condition and their borrowing status most of the variation in milk output per farm was explained by the number of crossbred milking cows in the dairy herd as credit is likely to facilitate investment in crossbred dairy cows it will have substantial impacts on smallholder dairy farms especially if it is targeted to credit constrained farms

under the weather health schooling and economic consequences of early life rainfall life in rural areas of developing countries is prone to many kinds of risk such as illness or mortality of household members crop or other income loss due to natural phenomena weather insect infestations or fire for example and civil conflict in addition to their contemporaneous effects the effects of certain types of shocks may still be felt many years or even decades later from a public policy standpoint it is particularly important to identify shocks that have large long run effects moreover the mechanics underlying the persistence of shocks may be of con siderable interest for example a health shock may have a long run effect simply because the health shock itself persists over time alternately the health shock may not directly affect long run outcomes but it could affect some other outcome such as educational attainment that helps determine long run well being in this paper we focus on shocks that occur at the very beginning of life we ask how sensi tive long run individual well being is to environmental conditions around the time of birth in particular we examine the effect of weather shocks around the time of birth on the adult health education and socioeconomic outcomes of indonesian women and men born between 1953 and 1974 in addition we attempt to shed light on the intervening pathways connecting early life rainfall to adult outcomes illuminating the roles of health and educational attainment in deter mining adult socioeconomic status this investigation has considerable data requirements it necessitates information on weather shocks experienced by individuals several decades earlier as well as detailed current informa tion on adult outcomes we use information in the indonesian family life surveys ifls on an individual s year and location of birth and link each individual in that survey to locality specific rainfall data for their birth year for individuals born in rural areas on whom we focus rainfall variation across space and time should generate corresponding variation in agricultural output and thus household income to deal with measurement error in the rainfall data we run instrumental variables regressions where variables for rainfall measured at slightly more distant rainfall stations serve as instruments for rainfall in the individual s birthplace and birth year we examine the impact of early life rainfall on a range of adult outcomes observed in 2000 we find that higher early life rainfall leads to improved health schooling and socioeconomic status for women women with 20 percent higher rainfall relative to normal local rainfall in their year and location of birth are 3 8 percentage points less likely to self report poor or very poor health they attain 0 57 centimeters greater height attain 0 22 more completed grades of

life expectancy schooling and lifetime labor supply theory and evidence revisited this paper presents a theoretical and empirical analysis of the role of life expectancy for optimal schooling and lifetime labor supply the results of a simple prototype ben porath model with age specific survival rates show that an increase in lifetime labor supply is not a necessary or a sufficient condition for greater life expectancy to increase optimal schooling the observed increase in survival rates during working ages that follows from the rectangularization of the survival function is crucial for schooling and labor supply the empirical results suggest that the relative benefits of schooling have been increasing across cohorts of u s men born between 1840 and 1930 a simple quantitative analysis shows that a realistic shift in the survival function can lead to an increase in schooling and a reduction in lifetime labor hours publication abstract

economic growth in a cross section of cities abstract we examine the relationship between urban characteristics in 1960 and urban growth between 1960 and 1990 income and population growth move together and both types of growth are 1 positively related to initial schooling 2 negatively related to initial unemployment and 3 negatively related to the initial share of employment in manufacturing racial composition and segregation are uncorrelated with urban growth across all cities but in cities with large nonwhite communities segregation is positively correlated with population growth government expenditures except for sanitation are uncorrelated with growth government debt is positively correlated with later growth

inequality the urban rural gap and migration using population and product consumption data from the demographic and health surveys i construct comparable measures of inequality and migration for 65 countries including some of the poorest countries in the world i find that the urban rural gap accounts for 40 of mean country inequality and much of its cross country variation one out of every four or five individuals raised in rural areas moves to urban areas as a young adult where they earn much higher incomes than nonmigrant rural permanent residents equally one out of every four or five individuals raised in urban areas moves to rural areas as a young adult where they earn much lower incomes than their nonmigrant urban cousins these flows and relative incomes are suggestive of a world where the population sorts itself geographically on the basis of its human capital and skill i show that a simple model of this sort explains the urban rural gap in living standards

the slave trade and the origins of mistrust in africa in a recent study nunn 2008 examines the long term impacts of africa s slave trade he finds that the slave trade which occurred over a period of more than 400 years had a significant negative effect on long term economic development although the article arguably identifies a negative causal relationship between the slave trade and income today the analysis is unable to establish the exact causal mechanisms underlying this reduced form relationship in this article we examine one of the channels through which the slave trade may affect economic development today combining contemporary individual level survey data with historical data on slave shipments by ethnic group we ask whether the slave trade caused a culture of mistrust to develop within africa initially slaves were captured primarily through state organized raids and warfare but as the trade progressed the environment of ubiquitous insecurity caused individuals to turn on others including friends and family members and to kidnap trick and sell each other into slavery sigismund wilhelm koelle 1854 p e h hair 1965 charles piot 1996 we hypothesize that in this environment a culture of mistrust may have evolved which may persist to this day we show that current differences in trust levels within africa can be traced back to the transatlantic and indian ocean slave trades combining contemporary individual level survey data with historical data on slave shipments by ethnic group we find that individuals whose ancestors were heavily raided during the slave trade are less trusting today evidence from a variety of identification strategies suggests that the relationship is causal examining causal mechanisms we show that most of the impact of the slave trade is through factors that are internal to the individual such as cultural norms beliefs and values jel j15 n57 z13

the shocking origins of political transitions evidence from earthquakes do earthquakes trigger political transitions using a rich panel dataset of 160 countries observed over 1950 2007 we find that earthquake shocks measured in terms of the effect of ground motion amplitude on death toll have two contradicting effects on political change on the one hand earthquakes drive transitions into democracy due to an affective shock which we interpret to be the reaction of citizens by which they hold the incumbent government responsible for earthquake damages on the other hand earthquakes indirectly hasten transitions into a less democratic regime because they increase the income level contemporaneously possibly due to short term emergency response and recovery expenditures and thus raising the opportunity cost of contesting the incumbent government overall we show that while not leading to a full fledged regime transition earthquake shocks open a new democratic window of opportunity but this window is narrowed by improved economic conditions

the legacies of forced freedom china s treaty ports abstract this paper investigates the long run development of china s treaty ports from the mid eighteenth century until today focusing on a sample of prefectures on the coast or on the yangtze river i document the dynamic development paths of treaty ports and their neighbors in alternate phases of closedness and openness i also provide suggestive evidence on migration and sector wise growth to understand the advantage of treaty ports in the long run

climate change hydro dependency and the african dam boom summary we examine africa s increasing reliance on hydropower in light of climate change induced variations in rainfall and the potential power outages that may result we use a continent wide riverflow model and ippc climate change scenarios and show that current plans for african dam building are fairly well matched with river flow predictions so that fears that international donors and national governments are making a series of expensive and environmentally damaging investments may be overstated however predictions of an increase in extreme events and reduced rainfall for certain countries mean there are still viability concerns for certain planned hydropower investments

the value of democracy evidence from road building in kenya ethnic favoritism is seen as antithetical to development this paper provides credible quantification of the extent of ethnic favoritism using data on road building in kenyan districts across the 1963 2011 period guided by a model it then examines whether the transition in and out of democracy under the same president constrains or exacerbates ethnic favoritism across the post independence period we find strong evidence of ethnic favoritism districts that share the ethnicity of the president receive twice as much expenditure on roads and have five times the length of paved roads built this favoritism disappears during periods of democracy jel d72 h54 j15 o15 o17 o22 r42

an instrumental variables approach to estimating tax revenue elasticities evidence from sub saharan africa this paper exploits the significant response of real gdp growth of sub saharan african countries to exogenous international commodity price and rainfall shocks to construct instrumental variables estimates of the tax revenue elasticity iv estimates yield that a 1 increase in gdp increases tax revenues by up to 2 5

the demarcation of land and the role of coordinating property institutions we use a natural experiment in nineteenth century ohio to analyze the economic effects of two dominant land demarcation regimes metes and bounds mb and the rectangular system rs mb is decentralized with plot shapes alignment and sizes defined individually rs is a centralized grid of uniform square plots that does not vary with topography we find large initial net benefits in land values from the rs and also that these effects persist into the twenty first century these findings reveal the importance of transaction costs and networks in affecting property rights land values markets and economic growth

trade openness and economic growth panel data evidence from sub saharan africa this paper uses an instrumental variables approach to estimate the relationship between trade openness and economic growth in sub saharan africa instrumental variables estimates show that economic growth has a significant negative contemporaneous effect on trade openness while trade openness has a significant positive effect on economic growth a 1 percentage point increase in the ratio of trade over gdp is associated with a short run increase in growth of approximately 0 5 in a given year the cumulative long run effect on the level of gdp per capita is larger reaching about 2

wealthier is healthier we estimate the effect of income on health using cross country timeseries data on health infant and child mortality and life expectancy and income per capita we use instrumental variables estimates using exogenous determinants of income growth to identify the pure income effect on health isolated from reverse causation or incidental association the long run income elasticity of infant and child mortality in developing countries lies between 0 2 and 0 4 using these estimates we calculate that over a half a million child deaths in the developing world in 1990 alone can be attributed to the poor economic performance in the 1980s

social norms savings behavior and growth we argue that many goods and decisions are not allocated or made through markets we interpret an agent s status as a ranking device that determines how well he or she fares in the nonmarket sector the existence of a nonmarket sector can endogenously generate a concern for relative position in for example the income distribution so that higher income implies higher status moreover it can naturally yield multiple equilibria it is thus possible to explain differences in growth rates across countries without recourse to differences in underlying preferences technologies or endowments different social organizations lead to different reduced form preferences which lead to different growth rates

the relationship between credit and productivity in chinese agriculture a microeconomic model of disequilibrium credit is an important element in agricultural production systems it allows producers to satisfy the cash needs induced by the production cycle which characterizes agriculture preparation planting cultivation and harvesting of the crops are typically done over a period of several months in which very little cash revenue is earned while expenditures on materials purchased inputs and consumption must be made in cash cash income is received a short time after the harvest in the absence of credit markets farmers would have to maintain cash reserves so as to facilitate production and consumption in the next cycle the availability of credit allows both greater consumption and greater purchased input use and thus increases welfare of the farmers

health nutrition and economic development the relationship between health and economic development is explored focusing on nutrition based health indicators the spotlight is placed on the inter related feedbacks between the influence of health on productivity on one hand and the influence of income on health status on the other disentangling causality in these relationships has preoccupied much of the literature we evaluate different empirical strategies that have been adopted and assess the results there is now a body of evidence based on careful empirical studies that demonstrates a causal relationship between health and labor productivity there is also evidence that at least among the very poor additional income is spent on improved nutrition there are two issues that have received little attention although we argue they are likely to be very important first measurement of health is discussed in detail evidence is presented on how taking into account differences in the extent of measurement error is critical for interpreting the impact of health on wages the same theme emerges in studies of the effect of income on health specifically calorie intake the key role of non linearities in these relationships is highlighted and we demonstrate that a good deal of the variation in estimates of income elasticities of demand for calories can be ascribed to the role of measurement and functional form authors

trends in rainfall and economic growth in africa a neglected cause of the african growth tragedy abstract we examine the role of rainfall trends in poor growth performance of sub saharan african nations relative to other developing countries using a new cross country panel climatic data set in an empirical economic growth framework our results show that rainfall has been a significant determinant of poor economic growth for african nations but not for other countries depending on the benchmark measure of potential rainfall we estimate that the direct impact under the scenario of no decline in rainfall would have resulted in a reduction of between around 15 and 40 of today s gap in african gdp per capita relative to the rest of the developing world

population and conflict medical innovations during the 1940s quickly resulted in significant health improvements around the world countries with initially higher mortality from infectious diseases experienced larger increases in life expectancy population and subsequent social conflict this cross country result is robust across alternative measures of conflict and is not driven by differential trends between countries with varying baseline characteristics a similar effect is also present within mexico initial suitability conditions for malaria varied across municipalities and anti malaria campaigns had differential effects on population growth and social conflict both across countries and within mexico increased conflict over scarce resources predominates and this effect is more pronounced during times of economic hardship specifically in countries with a poor growth record and in drought stricken areas in mexico at least during this time period a larger increase in population made social conflict more likely

government spending cyclicality evidence from transitory and persistent shocks in developing countries we revisit the debate of whether government spending is procyclical in developing countries our main contribution is to argue that beyond exogeneity of the income shock an empirical analysis of government spending cyclicality must be carefully tailored to the shock s persistence we first illustrate this point in a simple intertemporal model we then use instrumental variables estimation to characterize the response of government expenditures to exogenous shocks with different degrees of persistence our estimation strategy exploits that i year to year variations in rainfall have a significant positive contemporaneous effect on sub saharan african countries real gdp but this effect is transitory ii year to year variations in the gdp of sub saharan african countries oecd trading partners have a significant positive contemporaneous effect on sub saharan african countries real gdp and this effect is persistent using rainfall as an instrument for sub saharan african countries gdp yields a government consumption expenditures elasticity response of around 0 4 standard error 0 3 when the instrument is the gdp of sub saharan african countries oecd trading partners the estimated government consumption expenditures elasticity response is around 1 1 standard error 0 2 the elasticity response of government consumption expenditures to persistent income shocks is thus significantly higher relative to transitory shocks

the mission human capital transmission economic persistence and culture in south america this article examines the long term consequences of a historical human capital intervention the jesuit order founded religious missions in 1609 among the guarani in modern day argentina brazil and paraguay before their expulsion in 1767 missionaries instructed indigenous inhabitants in reading writing and various crafts using archival records as well as data at the individual and municipal level i show that in areas of former jesuit presence within the guarani area educational attainment was higher and remains so by 10 15 250 years later these educational differences have also translated into incomes that are 10 higher today the identification of the positive effect of the guarani jesuit missions emerges after comparing them with abandoned jesuit missions and neighboring franciscan guarani missions the enduring effects observed are consistent with transmission mechanisms of structural transformation occupational specialization and technology adoption in agriculture