From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Uni…ed Growth Theory and Comparative Economic
Development
Oded Galor
Luxembourg, May 22, 2012
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Uni…ed Growth Theory
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
From Stagnation to Growth and the Great Divergence
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Underlying Hypothesis
The understanding of the contemporary variation in income per
capita across the globe would remain obscured unless growth
theory would capture:
The process of development in its entirety
The forces that triggered the transition from stagnation to
growth of the currently developed economies
=) hurdles faced by LDCs
The role played by deep rooted factors in the di¤erential
timing of the transition from stagnation to growth
=) comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Underlying Hypothesis
The understanding of the contemporary variation in income per
capita across the globe would remain obscured unless growth
theory would capture:
The process of development in its entirety
The forces that triggered the transition from stagnation to
growth of the currently developed economies
=) hurdles faced by LDCs
The role played by deep rooted factors in the di¤erential
timing of the transition from stagnation to growth
=) comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Underlying Hypothesis
The understanding of the contemporary variation in income per
capita across the globe would remain obscured unless growth
theory would capture:
The process of development in its entirety
The forces that triggered the transition from stagnation to
growth of the currently developed economies
=) hurdles faced by LDCs
The role played by deep rooted factors in the di¤erential
timing of the transition from stagnation to growth
=) comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Underlying Hypothesis
The understanding of the contemporary variation in income per
capita across the globe would remain obscured unless growth
theory would capture:
The process of development in its entirety
The forces that triggered the transition from stagnation to
growth of the currently developed economies
=) hurdles faced by LDCs
The role played by deep rooted factors in the di¤erential
timing of the transition from stagnation to growth
=) comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Underlying Hypothesis
The understanding of the contemporary variation in income per
capita across the globe would remain obscured unless growth
theory would capture:
The process of development in its entirety
The forces that triggered the transition from stagnation to
growth of the currently developed economies
=) hurdles faced by LDCs
The role played by deep rooted factors in the di¤erential
timing of the transition from stagnation to growth
=) comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Underlying Hypothesis
The understanding of the contemporary variation in income per
capita across the globe would remain obscured unless growth
theory would capture:
The process of development in its entirety
The forces that triggered the transition from stagnation to
growth of the currently developed economies
=) hurdles faced by LDCs
The role played by deep rooted factors in the di¤erential
timing of the transition from stagnation to growth
=) comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Underlying Hypothesis
The understanding of the contemporary variation in income per
capita across the globe would remain obscured unless growth
theory would capture:
The process of development in its entirety
The forces that triggered the transition from stagnation to
growth of the currently developed economies
=) hurdles faced by LDCs
The role played by deep rooted factors in the di¤erential
timing of the transition from stagnation to growth
=) comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
A uni…ed theory of economic growth that accounts for:
The epoch of Malthusian stagnation
The take-o¤ from the Malthusian Regime
The emergence of human capital as a signi…cant factor
The onset of the demographic transition
A shift to sustained economic growth
Divergence in income per capita across countries
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
A uni…ed theory of economic growth that accounts for:
The epoch of Malthusian stagnation
The take-o¤ from the Malthusian Regime
The emergence of human capital as a signi…cant factor
The onset of the demographic transition
A shift to sustained economic growth
Divergence in income per capita across countries
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
A uni…ed theory of economic growth that accounts for:
The epoch of Malthusian stagnation
The take-o¤ from the Malthusian Regime
The emergence of human capital as a signi…cant factor
The onset of the demographic transition
A shift to sustained economic growth
Divergence in income per capita across countries
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
A uni…ed theory of economic growth that accounts for:
The epoch of Malthusian stagnation
The take-o¤ from the Malthusian Regime
The emergence of human capital as a signi…cant factor
The onset of the demographic transition
A shift to sustained economic growth
Divergence in income per capita across countries
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
A uni…ed theory of economic growth that accounts for:
The epoch of Malthusian stagnation
The take-o¤ from the Malthusian Regime
The emergence of human capital as a signi…cant factor
The onset of the demographic transition
A shift to sustained economic growth
Divergence in income per capita across countries
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
A uni…ed theory of economic growth that accounts for:
The epoch of Malthusian stagnation
The take-o¤ from the Malthusian Regime
The emergence of human capital as a signi…cant factor
The onset of the demographic transition
A shift to sustained economic growth
Divergence in income per capita across countries
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
A uni…ed theory of economic growth that accounts for:
The epoch of Malthusian stagnation
The take-o¤ from the Malthusian Regime
The emergence of human capital as a signi…cant factor
The onset of the demographic transition
A shift to sustained economic growth
Divergence in income per capita across countries
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
A uni…ed theory of economic growth that accounts for:
The epoch of Malthusian stagnation
The take-o¤ from the Malthusian Regime
The emergence of human capital as a signi…cant factor
The onset of the demographic transition
A shift to sustained economic growth
Divergence in income per capita across countries
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Outline
The complexity of the process of development
Uni…ed Growth Theory (UGT)
Implications of UGT for comparative development
Deep rooted factors in comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Outline
The complexity of the process of development
Uni…ed Growth Theory (UGT)
Implications of UGT for comparative development
Deep rooted factors in comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Outline
The complexity of the process of development
Uni…ed Growth Theory (UGT)
Implications of UGT for comparative development
Deep rooted factors in comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Outline
The complexity of the process of development
Uni…ed Growth Theory (UGT)
Implications of UGT for comparative development
Deep rooted factors in comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Outline
The complexity of the process of development
Uni…ed Growth Theory (UGT)
Implications of UGT for comparative development
Deep rooted factors in comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Phases of Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
The Malthusian Epoch
Developed Countries Emergence of Homo sapiens - 1750
LDCs
Emergence of Homo sapiens - 1900
The Post Malthusian Regime
Developed Countries
LDCs
1750 - 1870
1900 -
The Modern Growth Regime
Developed Countries
LDCs
Oded Galor
1870 - present
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Phases of Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
The Malthusian Epoch
Developed Countries Emergence of Homo sapiens - 1750
LDCs
Emergence of Homo sapiens - 1900
The Post Malthusian Regime
Developed Countries
LDCs
1750 - 1870
1900 -
The Modern Growth Regime
Developed Countries
LDCs
Oded Galor
1870 - present
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Phases of Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
The Malthusian Epoch
Developed Countries Emergence of Homo sapiens - 1750
LDCs
Emergence of Homo sapiens - 1900
The Post Malthusian Regime
Developed Countries
LDCs
1750 - 1870
1900 -
The Modern Growth Regime
Developed Countries
LDCs
Oded Galor
1870 - present
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Phases of Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
The Malthusian Epoch
Developed Countries Emergence of Homo sapiens - 1750
LDCs
Emergence of Homo sapiens - 1900
The Post Malthusian Regime
Developed Countries
LDCs
1750 - 1870
1900 -
The Modern Growth Regime
Developed Countries
LDCs
Oded Galor
1870 - present
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Technological progress and land expansion
=) Temporary increase in the level of income per capita
=) An increase in the size of the population
=) No e¤ect on the level of income per capita in the long run
Output per capita ‡uctuates around a subsistence level
Technologically advanced or land rich economies
=) Higher population density
=) Similar level of income per-capita in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Technological progress and land expansion
=) Temporary increase in the level of income per capita
=) An increase in the size of the population
=) No e¤ect on the level of income per capita in the long run
Output per capita ‡uctuates around a subsistence level
Technologically advanced or land rich economies
=) Higher population density
=) Similar level of income per-capita in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Technological progress and land expansion
=) Temporary increase in the level of income per capita
=) An increase in the size of the population
=) No e¤ect on the level of income per capita in the long run
Output per capita ‡uctuates around a subsistence level
Technologically advanced or land rich economies
=) Higher population density
=) Similar level of income per-capita in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Technological progress and land expansion
=) Temporary increase in the level of income per capita
=) An increase in the size of the population
=) No e¤ect on the level of income per capita in the long run
Output per capita ‡uctuates around a subsistence level
Technologically advanced or land rich economies
=) Higher population density
=) Similar level of income per-capita in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Technological progress and land expansion
=) Temporary increase in the level of income per capita
=) An increase in the size of the population
=) No e¤ect on the level of income per capita in the long run
Output per capita ‡uctuates around a subsistence level
Technologically advanced or land rich economies
=) Higher population density
=) Similar level of income per-capita in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Technological progress and land expansion
=) Temporary increase in the level of income per capita
=) An increase in the size of the population
=) No e¤ect on the level of income per capita in the long run
Output per capita ‡uctuates around a subsistence level
Technologically advanced or land rich economies
=) Higher population density
=) Similar level of income per-capita in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Technological progress and land expansion
=) Temporary increase in the level of income per capita
=) An increase in the size of the population
=) No e¤ect on the level of income per capita in the long run
Output per capita ‡uctuates around a subsistence level
Technologically advanced or land rich economies
=) Higher population density
=) Similar level of income per-capita in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Technological progress and land expansion
=) Temporary increase in the level of income per capita
=) An increase in the size of the population
=) No e¤ect on the level of income per capita in the long run
Output per capita ‡uctuates around a subsistence level
Technologically advanced or land rich economies
=) Higher population density
=) Similar level of income per-capita in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Technological progress and land expansion
=) Temporary increase in the level of income per capita
=) An increase in the size of the population
=) No e¤ect on the level of income per capita in the long run
Output per capita ‡uctuates around a subsistence level
Technologically advanced or land rich economies
=) Higher population density
=) Similar level of income per-capita in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Malthusian Fluctuations in Income Per Capita: England, 1260–1760
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Malthusian Adjustments of Income and Population: England, 1250–1750
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Timing of Transition to Agriculture and Population Density in 1500 CE
Conditional on land productivity, geographical factors, and continental …xed e¤ects
Source: Ashraf-Galor (AER 2011)
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Timing of Transition to Agriculture and Income Per Capita in 1500 CE
Conditional on land productivity, geographical factors, and continental …xed e¤ects
Source: Ashraf-Galor (AER 2011)
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Land Productivity and Population Density in 1500 CE
Conditional on transition timing, geographical factors, and continental …xed e¤ects
Source: Ashraf-Galor (AER 2011)
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Land Productivity and Income Per Capita in 1500 CE
Conditional on transition timing, geographical factors, and continental …xed e¤ects
Source: Ashraf-Galor (AER 2011)
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Post-Malthusian Regime
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Economies take-o¤ from a Malthusian equilibrium:
Population growth is still positively a¤ected by the level of income per capita
Technological progress accelerates and it results in a larger increase in output than in population
Income per capita and population grow at an increasingly faster
pace
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Post-Malthusian Regime
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Economies take-o¤ from a Malthusian equilibrium:
Population growth is still positively a¤ected by the level of income per capita
Technological progress accelerates and it results in a larger increase in output than in population
Income per capita and population grow at an increasingly faster
pace
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Post-Malthusian Regime
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Economies take-o¤ from a Malthusian equilibrium:
Population growth is still positively a¤ected by the level of income per capita
Technological progress accelerates and it results in a larger increase in output than in population
Income per capita and population grow at an increasingly faster
pace
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Post-Malthusian Regime
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Economies take-o¤ from a Malthusian equilibrium:
Population growth is still positively a¤ected by the level of income per capita
Technological progress accelerates and it results in a larger increase in output than in population
Income per capita and population grow at an increasingly faster
pace
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Post-Malthusian Regime
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Economies take-o¤ from a Malthusian equilibrium:
Population growth is still positively a¤ected by the level of income per capita
Technological progress accelerates and it results in a larger increase in output than in population
Income per capita and population grow at an increasingly faster
pace
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Regional Variation in the Timing of the Take-o¤: Early Take-O¤
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Regional Variation in the Timing of the Take-o¤: (Levels) Late Take-O¤
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Growth of GDP Per Capita and Population: Western O¤shoots, 1500-2000
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Growth of GDP Per Capita and Population: Western Europe, 1500-2000
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Growth of GDP Per Capita and Population: Africa 1500-2000
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Growth of GDP Per Capita and Population: Latin America 1500-2000
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Industrialization: Developed Economies
Oded Galor
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
(De)-Industrialization: Less Developed Economies
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Modern Growth Regime
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Technological progress accelerates
The demand for human capital increases
Population growth declines – The Demographic Transition
Gains in total output are no longer counterbalanced by population growth
Output per capita grows at a high sustainable level
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Modern Growth Regime
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Technological progress accelerates
The demand for human capital increases
Population growth declines – The Demographic Transition
Gains in total output are no longer counterbalanced by population growth
Output per capita grows at a high sustainable level
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Modern Growth Regime
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Technological progress accelerates
The demand for human capital increases
Population growth declines – The Demographic Transition
Gains in total output are no longer counterbalanced by population growth
Output per capita grows at a high sustainable level
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Modern Growth Regime
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Technological progress accelerates
The demand for human capital increases
Population growth declines – The Demographic Transition
Gains in total output are no longer counterbalanced by population growth
Output per capita grows at a high sustainable level
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Modern Growth Regime
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Technological progress accelerates
The demand for human capital increases
Population growth declines – The Demographic Transition
Gains in total output are no longer counterbalanced by population growth
Output per capita grows at a high sustainable level
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Modern Growth Regime
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Technological progress accelerates
The demand for human capital increases
Population growth declines – The Demographic Transition
Gains in total output are no longer counterbalanced by population growth
Output per capita grows at a high sustainable level
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Demographic Transition across Regions: Early Transition
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Demographic Transition across Regions: Late Transition
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
4
Time Elapsed since the Demographic Transition and Income per Capita, 2000
JPN
Log GDP Per Capita, 2000
-2
0
2
KWT
BHS
BHR
NAM
AGO
BTN
GIN
NGA
LAO
TGO
RWA
NPL
MLI
LBR
GMB
BEN
GHA
KOR
ATG
SAU
SYC
LBY
MEXTTO
LBN
VENCHL
CRI MUS
PAN MYS
BRA
BLZ
ZAF
BWA
DOM
SLV
PER
SUR
TUN
COL
THA
JOR
DZA
EGY
SWZ ECUALB
MAR
BOL CHNGUY PHL
LKA
IDN
AZE
GEO
TKM
ZWEARM
UZB
IND
SEN
KEN
MRT
VNM
SDN MNG
BGD
ZMB
KGZ
TZA
NER
MWI
GTM
IRN
PRY
SYR
HND
NIC
DJI
CMR
CIV
LSO
HTI
NOR
USA CHE
DNK
AUT
GBR
CAN
NLD
FIN
DEU
FRA
BEL
ITA
ESP
SWE
PRT
ARG
URY
HUN
JAM
ROMBGR
ETH
-4
BDI
COM
KHM
CAF
MDG
ERI
SGP
ISR
PRI
-2
-1
0
1
Log Years Elapsed since the Demogrpahic Transition
Oded Galor
2
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Divergence Across Regions: 1820-2000
Oded Galor
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Disparity in Income Per capita Across Regions: 1–2000
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Disparity in Income per Capita across Countries: 1-2008
Income per Capita
0
1000
1820
2008
Western O¤shoots
400
400
1,202
30,152
Western Europe
576
427
1,194
21,672
Latin America
400
400
691
6,973
Asia
456
470
581
5,611
Africa
472
425
420
1,780
Rich/Poor (ratio)
1.4
1.2
2.9
16.9
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Sustained Economic Growth:
Western Europe and Western O¤shoots, 1870-2001
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Growth of Income Per Capita:
Africa, Asia and Latin America, 1950-2001
Oded Galor
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Major Puzzles
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Context: The Malthusian Epoch
What accounts for the epoch of stagnation that characterized
most of human history?
Why had episodes of technological progress in the pre-industrialization
era failed to generate sustained economic growth?
Why had population growth counterbalanced the expansion of
resources per capita that could have been generated by technological progress?
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Major Puzzles
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Context: The Malthusian Epoch
What accounts for the epoch of stagnation that characterized
most of human history?
Why had episodes of technological progress in the pre-industrialization
era failed to generate sustained economic growth?
Why had population growth counterbalanced the expansion of
resources per capita that could have been generated by technological progress?
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Major Puzzles
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Context: The Malthusian Epoch
What accounts for the epoch of stagnation that characterized
most of human history?
Why had episodes of technological progress in the pre-industrialization
era failed to generate sustained economic growth?
Why had population growth counterbalanced the expansion of
resources per capita that could have been generated by technological progress?
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Major Puzzles
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Context: The Malthusian Epoch
What accounts for the epoch of stagnation that characterized
most of human history?
Why had episodes of technological progress in the pre-industrialization
era failed to generate sustained economic growth?
Why had population growth counterbalanced the expansion of
resources per capita that could have been generated by technological progress?
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Major Puzzles
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Context: The Malthusian Epoch
What accounts for the epoch of stagnation that characterized
most of human history?
Why had episodes of technological progress in the pre-industrialization
era failed to generate sustained economic growth?
Why had population growth counterbalanced the expansion of
resources per capita that could have been generated by technological progress?
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
...Major Puzzles
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Context: The Transition from Stagnation to Growth
What is the origin of the sudden spurt in growth rates of output
per capita and population?
What triggered the demographic transition?
Is a demographic transition critical for the transition to a state
of sustained economic growth?
What accounts for the transition from stagnation to growth of
the currently DCs and what are the implications of these factors
for the hurdles faced by LDCs in their attempt to transit to a
sustained growth regime?
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
...Major Puzzles
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Context: The Transition from Stagnation to Growth
What is the origin of the sudden spurt in growth rates of output
per capita and population?
What triggered the demographic transition?
Is a demographic transition critical for the transition to a state
of sustained economic growth?
What accounts for the transition from stagnation to growth of
the currently DCs and what are the implications of these factors
for the hurdles faced by LDCs in their attempt to transit to a
sustained growth regime?
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
...Major Puzzles
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Context: The Transition from Stagnation to Growth
What is the origin of the sudden spurt in growth rates of output
per capita and population?
What triggered the demographic transition?
Is a demographic transition critical for the transition to a state
of sustained economic growth?
What accounts for the transition from stagnation to growth of
the currently DCs and what are the implications of these factors
for the hurdles faced by LDCs in their attempt to transit to a
sustained growth regime?
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
...Major Puzzles
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Context: The Transition from Stagnation to Growth
What is the origin of the sudden spurt in growth rates of output
per capita and population?
What triggered the demographic transition?
Is a demographic transition critical for the transition to a state
of sustained economic growth?
What accounts for the transition from stagnation to growth of
the currently DCs and what are the implications of these factors
for the hurdles faced by LDCs in their attempt to transit to a
sustained growth regime?
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
...Major Puzzles
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Context: The Transition from Stagnation to Growth
What is the origin of the sudden spurt in growth rates of output
per capita and population?
What triggered the demographic transition?
Is a demographic transition critical for the transition to a state
of sustained economic growth?
What accounts for the transition from stagnation to growth of
the currently DCs and what are the implications of these factors
for the hurdles faced by LDCs in their attempt to transit to a
sustained growth regime?
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
...Major Puzzles
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Context: Comparative Development
What accounts for the sudden take-o¤ from stagnation to growth in
some countries and the persistent stagnation in others?
What governs the di¤erential timing of the demographic transition
across the globe?
What is the origin of the vast inequality in income per capita across
countries and regions?
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
...Major Puzzles
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Context: Comparative Development
What accounts for the sudden take-o¤ from stagnation to growth in
some countries and the persistent stagnation in others?
What governs the di¤erential timing of the demographic transition
across the globe?
What is the origin of the vast inequality in income per capita across
countries and regions?
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
...Major Puzzles
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Context: Comparative Development
What accounts for the sudden take-o¤ from stagnation to growth in
some countries and the persistent stagnation in others?
What governs the di¤erential timing of the demographic transition
across the globe?
What is the origin of the vast inequality in income per capita across
countries and regions?
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
...Major Puzzles
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Context: Comparative Development
What accounts for the sudden take-o¤ from stagnation to growth in
some countries and the persistent stagnation in others?
What governs the di¤erential timing of the demographic transition
across the globe?
What is the origin of the vast inequality in income per capita across
countries and regions?
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
...Major Puzzles
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Context: Comparative Development
What accounts for the great divergence in per capita income across
countries in the past two centuries?
What is the role of deep rooted factors in the contemporary
di¤erences in income per capita?
Has the transition to a state of sustained economic growth in
advanced economies adversely a¤ected the process of development
in less-developed economies?
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
...Major Puzzles
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Context: Comparative Development
What accounts for the great divergence in per capita income across
countries in the past two centuries?
What is the role of deep rooted factors in the contemporary
di¤erences in income per capita?
Has the transition to a state of sustained economic growth in
advanced economies adversely a¤ected the process of development
in less-developed economies?
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
...Major Puzzles
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Context: Comparative Development
What accounts for the great divergence in per capita income across
countries in the past two centuries?
What is the role of deep rooted factors in the contemporary
di¤erences in income per capita?
Has the transition to a state of sustained economic growth in
advanced economies adversely a¤ected the process of development
in less-developed economies?
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
...Major Puzzles
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Context: Comparative Development
What accounts for the great divergence in per capita income across
countries in the past two centuries?
What is the role of deep rooted factors in the contemporary
di¤erences in income per capita?
Has the transition to a state of sustained economic growth in
advanced economies adversely a¤ected the process of development
in less-developed economies?
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Inconsistency of non-UGT with the Growth Process
Inconsistent with the qualitative aspects of the growth process
during the Malthusian epoch and the Post-Malthusian Regime
Limited to the modern growth regime – a miniscule fraction (0.1%)
of the entire process of development
Do not capture the forces that brought about the transition of
developed countries from stagnation to growth and hence unable to
shed light of the hurdles faced by LDCs in their attempt to take-o¤
to a state of sustained economic growth
Unable to capture the role of deep rooted factors in the
contemporary disparity in income per-capita across the globe
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Inconsistency of non-UGT with the Growth Process
Inconsistent with the qualitative aspects of the growth process
during the Malthusian epoch and the Post-Malthusian Regime
Limited to the modern growth regime – a miniscule fraction (0.1%)
of the entire process of development
Do not capture the forces that brought about the transition of
developed countries from stagnation to growth and hence unable to
shed light of the hurdles faced by LDCs in their attempt to take-o¤
to a state of sustained economic growth
Unable to capture the role of deep rooted factors in the
contemporary disparity in income per-capita across the globe
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Inconsistency of non-UGT with the Growth Process
Inconsistent with the qualitative aspects of the growth process
during the Malthusian epoch and the Post-Malthusian Regime
Limited to the modern growth regime – a miniscule fraction (0.1%)
of the entire process of development
Do not capture the forces that brought about the transition of
developed countries from stagnation to growth and hence unable to
shed light of the hurdles faced by LDCs in their attempt to take-o¤
to a state of sustained economic growth
Unable to capture the role of deep rooted factors in the
contemporary disparity in income per-capita across the globe
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Inconsistency of non-UGT with the Growth Process
Inconsistent with the qualitative aspects of the growth process
during the Malthusian epoch and the Post-Malthusian Regime
Limited to the modern growth regime – a miniscule fraction (0.1%)
of the entire process of development
Do not capture the forces that brought about the transition of
developed countries from stagnation to growth and hence unable to
shed light of the hurdles faced by LDCs in their attempt to take-o¤
to a state of sustained economic growth
Unable to capture the role of deep rooted factors in the
contemporary disparity in income per-capita across the globe
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Malthusian Epoch
The Post-Malthusian Regime
The Modern Growth Regime
Major Puzzles
Inconsistency of Non-Uni…ed Growth Theories
Inconsistency of non-UGT with the Growth Process
Inconsistent with the qualitative aspects of the growth process
during the Malthusian epoch and the Post-Malthusian Regime
Limited to the modern growth regime – a miniscule fraction (0.1%)
of the entire process of development
Do not capture the forces that brought about the transition of
developed countries from stagnation to growth and hence unable to
shed light of the hurdles faced by LDCs in their attempt to take-o¤
to a state of sustained economic growth
Unable to capture the role of deep rooted factors in the
contemporary disparity in income per-capita across the globe
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
The Fundamental Challenge
Development of a uni…ed growth theory that accounts for:
An epoch of Malthusian stagnation
The take-o¤ from the Malthusian Regime
The emergence of human capital as a signi…cant factor
The demographic transition
A shift to sustained economic growth
Divergence in income per capita across countries
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
The Fundamental Challenge
Development of a uni…ed growth theory that accounts for:
An epoch of Malthusian stagnation
The take-o¤ from the Malthusian Regime
The emergence of human capital as a signi…cant factor
The demographic transition
A shift to sustained economic growth
Divergence in income per capita across countries
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
The Fundamental Challenge
Development of a uni…ed growth theory that accounts for:
An epoch of Malthusian stagnation
The take-o¤ from the Malthusian Regime
The emergence of human capital as a signi…cant factor
The demographic transition
A shift to sustained economic growth
Divergence in income per capita across countries
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
The Fundamental Challenge
Development of a uni…ed growth theory that accounts for:
An epoch of Malthusian stagnation
The take-o¤ from the Malthusian Regime
The emergence of human capital as a signi…cant factor
The demographic transition
A shift to sustained economic growth
Divergence in income per capita across countries
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
The Fundamental Challenge
Development of a uni…ed growth theory that accounts for:
An epoch of Malthusian stagnation
The take-o¤ from the Malthusian Regime
The emergence of human capital as a signi…cant factor
The demographic transition
A shift to sustained economic growth
Divergence in income per capita across countries
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
The Fundamental Challenge
Development of a uni…ed growth theory that accounts for:
An epoch of Malthusian stagnation
The take-o¤ from the Malthusian Regime
The emergence of human capital as a signi…cant factor
The demographic transition
A shift to sustained economic growth
Divergence in income per capita across countries
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
The Fundamental Challenge
Development of a uni…ed growth theory that accounts for:
An epoch of Malthusian stagnation
The take-o¤ from the Malthusian Regime
The emergence of human capital as a signi…cant factor
The demographic transition
A shift to sustained economic growth
Divergence in income per capita across countries
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
...The Fundamental Challenges
Two dimensions of “uni…cation”:
Unifying the entire process of development
Unifying the micro structure of the economy
(i.e., preferences remain unchanged, but endogenous changes in the
economic environment triggers di¤erent choices in di¤erent stages of
development)
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
...The Fundamental Challenges
Two dimensions of “uni…cation”:
Unifying the entire process of development
Unifying the micro structure of the economy
(i.e., preferences remain unchanged, but endogenous changes in the
economic environment triggers di¤erent choices in di¤erent stages of
development)
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
...The Fundamental Challenges
Two dimensions of “uni…cation”:
Unifying the entire process of development
Unifying the micro structure of the economy
(i.e., preferences remain unchanged, but endogenous changes in the
economic environment triggers di¤erent choices in di¤erent stages of
development)
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
...The Fundamental Challenges
A dynamical system that permits an escape from a stable
Malthusian Steady-State:
A major shock in an environment characterized by multiple locally stable equilibria
(inconsistent with evidence of a gradual transition (Crafts))
A gradual escape from an absorbing (stable) equilibrium
(contradiction to the essence of a stable equilibrium)
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
...The Fundamental Challenges
A dynamical system that permits an escape from a stable
Malthusian Steady-State:
A major shock in an environment characterized by multiple locally stable equilibria
(inconsistent with evidence of a gradual transition (Crafts))
A gradual escape from an absorbing (stable) equilibrium
(contradiction to the essence of a stable equilibrium)
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
...The Fundamental Challenges
A dynamical system that permits an escape from a stable
Malthusian Steady-State:
A major shock in an environment characterized by multiple locally stable equilibria
(inconsistent with evidence of a gradual transition (Crafts))
A gradual escape from an absorbing (stable) equilibrium
(contradiction to the essence of a stable equilibrium)
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
...The Fundamental Challenges
Methodological innovation:
Phase transition via the evolution of latent state variables that
ultimately a¤ects the qualitative properties of the dynamical
system
The evolution of a latent state variable (the demand for human capital) ultimately changes the dynamical system qualitatively
The Malthusian equilibrium vanishes endogenously
The economy is gravitated towards the emerging Modern
Growth Regime
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
...The Fundamental Challenges
Methodological innovation:
Phase transition via the evolution of latent state variables that
ultimately a¤ects the qualitative properties of the dynamical
system
The evolution of a latent state variable (the demand for human capital) ultimately changes the dynamical system qualitatively
The Malthusian equilibrium vanishes endogenously
The economy is gravitated towards the emerging Modern
Growth Regime
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
...The Fundamental Challenges
Methodological innovation:
Phase transition via the evolution of latent state variables that
ultimately a¤ects the qualitative properties of the dynamical
system
The evolution of a latent state variable (the demand for human capital) ultimately changes the dynamical system qualitatively
The Malthusian equilibrium vanishes endogenously
The economy is gravitated towards the emerging Modern
Growth Regime
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
...The Fundamental Challenges
Methodological innovation:
Phase transition via the evolution of latent state variables that
ultimately a¤ects the qualitative properties of the dynamical
system
The evolution of a latent state variable (the demand for human capital) ultimately changes the dynamical system qualitatively
The Malthusian equilibrium vanishes endogenously
The economy is gravitated towards the emerging Modern
Growth Regime
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
...The Fundamental Challenges
Methodological innovation:
Phase transition via the evolution of latent state variables that
ultimately a¤ects the qualitative properties of the dynamical
system
The evolution of a latent state variable (the demand for human capital) ultimately changes the dynamical system qualitatively
The Malthusian equilibrium vanishes endogenously
The economy is gravitated towards the emerging Modern
Growth Regime
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
Characteristics of the Main Transitions
Transition from Malthusian to Post-Malthusian Regime:
Faster rates of technological progress
Faster rate of population growth
Transition from the Post-Malthusian to Modern Growth Regime:
Faster rate of technological progress
Faster rate of human capital accumulation
Decline in population growth
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
Characteristics of the Main Transitions
Transition from Malthusian to Post-Malthusian Regime:
Faster rates of technological progress
Faster rate of population growth
Transition from the Post-Malthusian to Modern Growth Regime:
Faster rate of technological progress
Faster rate of human capital accumulation
Decline in population growth
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
Characteristics of the Main Transitions
Transition from Malthusian to Post-Malthusian Regime:
Faster rates of technological progress
Faster rate of population growth
Transition from the Post-Malthusian to Modern Growth Regime:
Faster rate of technological progress
Faster rate of human capital accumulation
Decline in population growth
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
Characteristics of the Main Transitions
Transition from Malthusian to Post-Malthusian Regime:
Faster rates of technological progress
Faster rate of population growth
Transition from the Post-Malthusian to Modern Growth Regime:
Faster rate of technological progress
Faster rate of human capital accumulation
Decline in population growth
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
Characteristics of the Main Transitions
Transition from Malthusian to Post-Malthusian Regime:
Faster rates of technological progress
Faster rate of population growth
Transition from the Post-Malthusian to Modern Growth Regime:
Faster rate of technological progress
Faster rate of human capital accumulation
Decline in population growth
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
Characteristics of the Main Transitions
Transition from Malthusian to Post-Malthusian Regime:
Faster rates of technological progress
Faster rate of population growth
Transition from the Post-Malthusian to Modern Growth Regime:
Faster rate of technological progress
Faster rate of human capital accumulation
Decline in population growth
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
Characteristics of the Main Transitions
Transition from Malthusian to Post-Malthusian Regime:
Faster rates of technological progress
Faster rate of population growth
Transition from the Post-Malthusian to Modern Growth Regime:
Faster rate of technological progress
Faster rate of human capital accumulation
Decline in population growth
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
Characteristics of the Main Transitions
Transition from Malthusian to Post-Malthusian Regime:
Faster rates of technological progress
Faster rate of population growth
Transition from the Post-Malthusian to Modern Growth Regime:
Faster rate of technological progress
Faster rate of human capital accumulation
Decline in population growth
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
Suggestive Evidence
The forces behind these transitions may be hidden therefore in
the understanding of how:
changes in the technological environment a¤ects population size
and quality
the size and the quality of the population a¤ect the rate of
technological progress
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
Suggestive Evidence
The forces behind these transitions may be hidden therefore in
the understanding of how:
changes in the technological environment a¤ects population size
and quality
the size and the quality of the population a¤ect the rate of
technological progress
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
Suggestive Evidence
The forces behind these transitions may be hidden therefore in
the understanding of how:
changes in the technological environment a¤ects population size
and quality
the size and the quality of the population a¤ect the rate of
technological progress
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Fundamental Challenge
Characteristics of the Main Transitions
Suggestive Evidence
The forces behind these transitions may be hidden therefore in
the understanding of how:
changes in the technological environment a¤ects population size
and quality
the size and the quality of the population a¤ect the rate of
technological progress
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Basic Structure of the Model
Overlapping-generations economy
t = 0; 1; 2; 3:::
One homogeneous good
2 factors of production:
Labor (measured in e¢ ciency units)
Land
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Basic Structure of the Model
Overlapping-generations economy
t = 0; 1; 2; 3:::
One homogeneous good
2 factors of production:
Labor (measured in e¢ ciency units)
Land
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Basic Structure of the Model
Overlapping-generations economy
t = 0; 1; 2; 3:::
One homogeneous good
2 factors of production:
Labor (measured in e¢ ciency units)
Land
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Basic Structure of the Model
Overlapping-generations economy
t = 0; 1; 2; 3:::
One homogeneous good
2 factors of production:
Labor (measured in e¢ ciency units)
Land
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Basic Structure of the Model
Overlapping-generations economy
t = 0; 1; 2; 3:::
One homogeneous good
2 factors of production:
Labor (measured in e¢ ciency units)
Land
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Basic Structure of the Model
Overlapping-generations economy
t = 0; 1; 2; 3:::
One homogeneous good
2 factors of production:
Labor (measured in e¢ ciency units)
Land
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Basic Structure of the Model
Overlapping-generations economy
t = 0; 1; 2; 3:::
One homogeneous good
2 factors of production:
Labor (measured in e¢ ciency units)
Land
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Factor Supply
Land is …xed over time
e.g., surface of planet earth
E¢ ciency units of labor evolves endogenously
determined by households’decisions about the number and
level of human capital of their children
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Factor Supply
Land is …xed over time
e.g., surface of planet earth
E¢ ciency units of labor evolves endogenously
determined by households’decisions about the number and
level of human capital of their children
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Factor Supply
Land is …xed over time
e.g., surface of planet earth
E¢ ciency units of labor evolves endogenously
determined by households’decisions about the number and
level of human capital of their children
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Factor Supply
Land is …xed over time
e.g., surface of planet earth
E¢ ciency units of labor evolves endogenously
determined by households’decisions about the number and
level of human capital of their children
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Factor Supply
Land is …xed over time
e.g., surface of planet earth
E¢ ciency units of labor evolves endogenously
determined by households’decisions about the number and
level of human capital of their children
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Malthusian Structure
Positive e¤ect of income on population
y " =) L "
Fixed factor of production - Land
L " =) MPL # =) y #
Output per capita is constant in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Malthusian Structure
Positive e¤ect of income on population
y " =) L "
Fixed factor of production - Land
L " =) MPL # =) y #
Output per capita is constant in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Malthusian Structure
Positive e¤ect of income on population
y " =) L "
Fixed factor of production - Land
L " =) MPL # =) y #
Output per capita is constant in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Malthusian Structure
Positive e¤ect of income on population
y " =) L "
Fixed factor of production - Land
L " =) MPL # =) y #
Output per capita is constant in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Malthusian Structure
Positive e¤ect of income on population
y " =) L "
Fixed factor of production - Land
L " =) MPL # =) y #
Output per capita is constant in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Malthusian Structure
Positive e¤ect of income on population
y " =) L "
Fixed factor of production - Land
L " =) MPL # =) y #
Output per capita is constant in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Malthusian Structure
Positive e¤ect of income on population
y " =) L "
Fixed factor of production - Land
L " =) MPL # =) y #
Output per capita is constant in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Malthusian Structure
Positive e¤ect of income on population
y " =) L "
Fixed factor of production - Land
L " =) MPL # =) y #
Output per capita is constant in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Malthusian Structure
Positive e¤ect of income on population
y " =) L "
Fixed factor of production - Land
L " =) MPL # =) y #
Output per capita is constant in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Production
Output per worker produced at time t
yt =
At
X
Ht
Ht
Lt
At X
Lt
(1
)
technological level
land
Human capital
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Production
Output per worker produced at time t
yt =
At
X
Ht
Ht
Lt
At X
Lt
(1
)
technological level
land
Human capital
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Production
Output per worker produced at time t
yt =
At
X
Ht
Ht
Lt
At X
Lt
(1
)
technological level
land
Human capital
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Production
Output per worker produced at time t
yt =
At
X
Ht
Ht
Lt
At X
Lt
(1
)
technological level
land
Human capital
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Production
Output per worker produced at time t
yt =
At
X
Ht
Ht
Lt
At X
Lt
(1
)
technological level
land
Human capital
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Production in Malthusian Epoch
Positive e¤ect of income on population
At " =) yt " =) Lt "
Fixed factor of production - Land - X
Lt " =) y #
Output per capita is constant in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Production in Malthusian Epoch
Positive e¤ect of income on population
At " =) yt " =) Lt "
Fixed factor of production - Land - X
Lt " =) y #
Output per capita is constant in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Production in Malthusian Epoch
Positive e¤ect of income on population
At " =) yt " =) Lt "
Fixed factor of production - Land - X
Lt " =) y #
Output per capita is constant in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Production in Malthusian Epoch
Positive e¤ect of income on population
At " =) yt " =) Lt "
Fixed factor of production - Land - X
Lt " =) y #
Output per capita is constant in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Production in Malthusian Epoch
Positive e¤ect of income on population
At " =) yt " =) Lt "
Fixed factor of production - Land - X
Lt " =) y #
Output per capita is constant in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Production in Malthusian Epoch
Positive e¤ect of income on population
At " =) yt " =) Lt "
Fixed factor of production - Land - X
Lt " =) y #
Output per capita is constant in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Production in Malthusian Epoch
Positive e¤ect of income on population
At " =) yt " =) Lt "
Fixed factor of production - Land - X
Lt " =) y #
Output per capita is constant in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Production in Malthusian Epoch
Positive e¤ect of income on population
At " =) yt " =) Lt "
Fixed factor of production - Land - X
Lt " =) y #
Output per capita is constant in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Production in Malthusian Epoch
Positive e¤ect of income on population
At " =) yt " =) Lt "
Fixed factor of production - Land - X
Lt " =) y #
Output per capita is constant in the long-run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Sources of Technological Progress
Early stage of development
Population size positively a¤ects technological progress:
Lt "
=)
At "
Channels:
Supply of innovations
Demand for innovations
Di¤usion of knowledge
Division of labor
Extent of trade
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Sources of Technological Progress
Early stage of development
Population size positively a¤ects technological progress:
Lt "
=)
At "
Channels:
Supply of innovations
Demand for innovations
Di¤usion of knowledge
Division of labor
Extent of trade
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Sources of Technological Progress
Early stage of development
Population size positively a¤ects technological progress:
Lt "
=)
At "
Channels:
Supply of innovations
Demand for innovations
Di¤usion of knowledge
Division of labor
Extent of trade
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Sources of Technological Progress
Early stage of development
Population size positively a¤ects technological progress:
Lt "
=)
At "
Channels:
Supply of innovations
Demand for innovations
Di¤usion of knowledge
Division of labor
Extent of trade
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Sources of Technological Progress
Early stage of development
Population size positively a¤ects technological progress:
Lt "
=)
At "
Channels:
Supply of innovations
Demand for innovations
Di¤usion of knowledge
Division of labor
Extent of trade
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Sources of Technological Progress
Early stage of development
Population size positively a¤ects technological progress:
Lt "
=)
At "
Channels:
Supply of innovations
Demand for innovations
Di¤usion of knowledge
Division of labor
Extent of trade
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Sources of Technological Progress
Early stage of development
Population size positively a¤ects technological progress:
Lt "
=)
At "
Channels:
Supply of innovations
Demand for innovations
Di¤usion of knowledge
Division of labor
Extent of trade
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Sources of Technological Progress
Early stage of development
Population size positively a¤ects technological progress:
Lt "
=)
At "
Channels:
Supply of innovations
Demand for innovations
Di¤usion of knowledge
Division of labor
Extent of trade
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Sources of Technological Progress
Early stage of development
Population size positively a¤ects technological progress:
Lt "
=)
At "
Channels:
Supply of innovations
Demand for innovations
Di¤usion of knowledge
Division of labor
Extent of trade
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Sources of Technological Progress
Early stage of development
Population size positively a¤ects technological progress:
Lt "
=)
At "
Channels:
Supply of innovations
Demand for innovations
Di¤usion of knowledge
Division of labor
Extent of trade
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Sources of Technological Progress
Early stage of development
Population size positively a¤ects technological progress:
Lt "
=)
At "
Channels:
Supply of innovations
Demand for innovations
Di¤usion of knowledge
Division of labor
Extent of trade
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
...Sources of Technological Progress
Later Stages of Development
Human capital positively a¤ects technological progress
et "
=)
At "
Educated individuals have a comparative advantage in
adopting and advancing new technologies
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
...Sources of Technological Progress
Later Stages of Development
Human capital positively a¤ects technological progress
et "
=)
At "
Educated individuals have a comparative advantage in
adopting and advancing new technologies
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
...Sources of Technological Progress
Later Stages of Development
Human capital positively a¤ects technological progress
et "
=)
At "
Educated individuals have a comparative advantage in
adopting and advancing new technologies
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
...Sources of Technological Progress
Later Stages of Development
Human capital positively a¤ects technological progress
et "
=)
At "
Educated individuals have a comparative advantage in
adopting and advancing new technologies
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
...Sources of Technological Progress
Later Stages of Development
Human capital positively a¤ects technological progress
et "
=)
At "
Educated individuals have a comparative advantage in
adopting and advancing new technologies
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
...Sources of Technological Progress
Later Stages of Development
Human capital positively a¤ects technological progress
et "
=)
At "
Educated individuals have a comparative advantage in
adopting and advancing new technologies
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Technological Progress
Technological progress over time
At+1 At
= g (et ; Lt )
At
gt+1
gt+1
rate of tech progress
et
education
Lt
population size
g (0; Lt ) > 0
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Technological Progress
Technological progress over time
At+1 At
= g (et ; Lt )
At
gt+1
gt+1
rate of tech progress
et
education
Lt
population size
g (0; Lt ) > 0
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Technological Progress
Technological progress over time
At+1 At
= g (et ; Lt )
At
gt+1
gt+1
rate of tech progress
et
education
Lt
population size
g (0; Lt ) > 0
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Technological Progress
Technological progress over time
At+1 At
= g (et ; Lt )
At
gt+1
gt+1
rate of tech progress
et
education
Lt
population size
g (0; Lt ) > 0
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Technological Progress
Technological progress over time
At+1 At
= g (et ; Lt )
At
gt+1
gt+1
rate of tech progress
et
education
Lt
population size
g (0; Lt ) > 0
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Technological Progress
Technological progress over time
At+1 At
= g (et ; Lt )
At
gt+1
gt+1
rate of tech progress
et
education
Lt
population size
g (0; Lt ) > 0
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Technological Progress
g t +1
g t +1 = g (et , Lt )
g l(Lt )
et
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Origins of Human Capital Formation
The increase in the rate of technological progress increases the
demand for human capital
Human capital permits individuals to better cope with the changes
in the technological environment
The introduction of new technologies is skill-biased in the shortrun, although the nature of the technology is skill-biased or skillsaving in the long run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Origins of Human Capital Formation
The increase in the rate of technological progress increases the
demand for human capital
Human capital permits individuals to better cope with the changes
in the technological environment
The introduction of new technologies is skill-biased in the shortrun, although the nature of the technology is skill-biased or skillsaving in the long run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Origins of Human Capital Formation
The increase in the rate of technological progress increases the
demand for human capital
Human capital permits individuals to better cope with the changes
in the technological environment
The introduction of new technologies is skill-biased in the shortrun, although the nature of the technology is skill-biased or skillsaving in the long run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Origins of Human Capital Formation
The increase in the rate of technological progress increases the
demand for human capital
Human capital permits individuals to better cope with the changes
in the technological environment
The introduction of new technologies is skill-biased in the shortrun, although the nature of the technology is skill-biased or skillsaving in the long run
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Human Capital Formation
Human capital of children of generation t
ht+1 = h(et+1 ; gt+1 )
et+1
gt+1
education
rate of tech progress
h(0; 0) = 1
heg (e t+1 ; g t+1 ) > 0
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Human Capital Formation
Human capital of children of generation t
ht+1 = h(et+1 ; gt+1 )
et+1
gt+1
education
rate of tech progress
h(0; 0) = 1
heg (e t+1 ; g t+1 ) > 0
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Human Capital Formation
Human capital of children of generation t
ht+1 = h(et+1 ; gt+1 )
et+1
gt+1
education
rate of tech progress
h(0; 0) = 1
heg (e t+1 ; g t+1 ) > 0
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Human Capital Formation
Human capital of children of generation t
ht+1 = h(et+1 ; gt+1 )
et+1
gt+1
education
rate of tech progress
h(0; 0) = 1
heg (e t+1 ; g t+1 ) > 0
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Human Capital Formation
Human capital of children of generation t
ht+1 = h(et+1 ; gt+1 )
et+1
gt+1
education
rate of tech progress
h(0; 0) = 1
heg (e t+1 ; g t+1 ) > 0
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Human Capital Formation
Human capital of children of generation t
ht+1 = h(et+1 ; gt+1 )
et+1
gt+1
education
rate of tech progress
h(0; 0) = 1
heg (e t+1 ; g t+1 ) > 0
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Triggers of the Demographic Transition
The rise in the demand for human capital induces parents to
substitute quality for quantity of children
The rise in income along with the rise in the potential return
to human capital generates:
An income e¤ect - more income to spend on children
Substitution e¤ects
The opportunity cost of raising children increases
The return to investment in children’s human capital
increases
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Triggers of the Demographic Transition
The rise in the demand for human capital induces parents to
substitute quality for quantity of children
The rise in income along with the rise in the potential return
to human capital generates:
An income e¤ect - more income to spend on children
Substitution e¤ects
The opportunity cost of raising children increases
The return to investment in children’s human capital
increases
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Triggers of the Demographic Transition
The rise in the demand for human capital induces parents to
substitute quality for quantity of children
The rise in income along with the rise in the potential return
to human capital generates:
An income e¤ect - more income to spend on children
Substitution e¤ects
The opportunity cost of raising children increases
The return to investment in children’s human capital
increases
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Triggers of the Demographic Transition
The rise in the demand for human capital induces parents to
substitute quality for quantity of children
The rise in income along with the rise in the potential return
to human capital generates:
An income e¤ect - more income to spend on children
Substitution e¤ects
The opportunity cost of raising children increases
The return to investment in children’s human capital
increases
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Triggers of the Demographic Transition
The rise in the demand for human capital induces parents to
substitute quality for quantity of children
The rise in income along with the rise in the potential return
to human capital generates:
An income e¤ect - more income to spend on children
Substitution e¤ects
The opportunity cost of raising children increases
The return to investment in children’s human capital
increases
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Triggers of the Demographic Transition
The rise in the demand for human capital induces parents to
substitute quality for quantity of children
The rise in income along with the rise in the potential return
to human capital generates:
An income e¤ect - more income to spend on children
Substitution e¤ects
The opportunity cost of raising children increases
The return to investment in children’s human capital
increases
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Triggers of the Demographic Transition
The rise in the demand for human capital induces parents to
substitute quality for quantity of children
The rise in income along with the rise in the potential return
to human capital generates:
An income e¤ect - more income to spend on children
Substitution e¤ects
The opportunity cost of raising children increases
The return to investment in children’s human capital
increases
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
...Triggers of the Demographic Transition
Early part of the second phase of industrialization:
The income e¤ect dominates and population growth and human
capital formation increases:
The subsistence consumption constraint (that adversely a¤ect
resources devoted to children) has a larger e¤ect at low levels
of income
The demand for human capital is moderate
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
...Triggers of the Demographic Transition
Early part of the second phase of industrialization:
The income e¤ect dominates and population growth and human
capital formation increases:
The subsistence consumption constraint (that adversely a¤ect
resources devoted to children) has a larger e¤ect at low levels
of income
The demand for human capital is moderate
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
...Triggers of the Demographic Transition
Early part of the second phase of industrialization:
The income e¤ect dominates and population growth and human
capital formation increases:
The subsistence consumption constraint (that adversely a¤ect
resources devoted to children) has a larger e¤ect at low levels
of income
The demand for human capital is moderate
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
...Triggers of the Demographic Transition
Early part of the second phase of industrialization:
The income e¤ect dominates and population growth and human
capital formation increases:
The subsistence consumption constraint (that adversely a¤ect
resources devoted to children) has a larger e¤ect at low levels
of income
The demand for human capital is moderate
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
...Triggers of the Demographic Transition
Later part of the second phase of industrialization:
The substitution e¤ect dominates, population growth declines
and human capital formation increases further
The subsistence consumption constraint (that adversely a¤ect
resources devoted to children) has a lower e¤ect at high levels
of income
The demand for human capital is more signi…cant
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
...Triggers of the Demographic Transition
Later part of the second phase of industrialization:
The substitution e¤ect dominates, population growth declines
and human capital formation increases further
The subsistence consumption constraint (that adversely a¤ect
resources devoted to children) has a lower e¤ect at high levels
of income
The demand for human capital is more signi…cant
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
...Triggers of the Demographic Transition
Later part of the second phase of industrialization:
The substitution e¤ect dominates, population growth declines
and human capital formation increases further
The subsistence consumption constraint (that adversely a¤ect
resources devoted to children) has a lower e¤ect at high levels
of income
The demand for human capital is more signi…cant
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Individuals
Live for 2 period
Childhood: (1st Period):
Consume a fraction of their parental unit-time endowment
The required time increases with children’s quality
time required to raise a child, regardless of quality
time needed to raise a child with education et+1
+ et+1
Parenthood (2nd Period):
Allocate time between childrearing and work
Choose the optimal mixture of quantity and quality of children
Consume
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Individuals
Live for 2 period
Childhood: (1st Period):
Consume a fraction of their parental unit-time endowment
The required time increases with children’s quality
time required to raise a child, regardless of quality
time needed to raise a child with education et+1
+ et+1
Parenthood (2nd Period):
Allocate time between childrearing and work
Choose the optimal mixture of quantity and quality of children
Consume
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Individuals
Live for 2 period
Childhood: (1st Period):
Consume a fraction of their parental unit-time endowment
The required time increases with children’s quality
time required to raise a child, regardless of quality
time needed to raise a child with education et+1
+ et+1
Parenthood (2nd Period):
Allocate time between childrearing and work
Choose the optimal mixture of quantity and quality of children
Consume
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Individuals
Live for 2 period
Childhood: (1st Period):
Consume a fraction of their parental unit-time endowment
The required time increases with children’s quality
time required to raise a child, regardless of quality
time needed to raise a child with education et+1
+ et+1
Parenthood (2nd Period):
Allocate time between childrearing and work
Choose the optimal mixture of quantity and quality of children
Consume
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Individuals
Live for 2 period
Childhood: (1st Period):
Consume a fraction of their parental unit-time endowment
The required time increases with children’s quality
time required to raise a child, regardless of quality
time needed to raise a child with education et+1
+ et+1
Parenthood (2nd Period):
Allocate time between childrearing and work
Choose the optimal mixture of quantity and quality of children
Consume
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Individuals
Live for 2 period
Childhood: (1st Period):
Consume a fraction of their parental unit-time endowment
The required time increases with children’s quality
time required to raise a child, regardless of quality
time needed to raise a child with education et+1
+ et+1
Parenthood (2nd Period):
Allocate time between childrearing and work
Choose the optimal mixture of quantity and quality of children
Consume
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Individuals
Live for 2 period
Childhood: (1st Period):
Consume a fraction of their parental unit-time endowment
The required time increases with children’s quality
time required to raise a child, regardless of quality
time needed to raise a child with education et+1
+ et+1
Parenthood (2nd Period):
Allocate time between childrearing and work
Choose the optimal mixture of quantity and quality of children
Consume
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Individuals
Live for 2 period
Childhood: (1st Period):
Consume a fraction of their parental unit-time endowment
The required time increases with children’s quality
time required to raise a child, regardless of quality
time needed to raise a child with education et+1
+ et+1
Parenthood (2nd Period):
Allocate time between childrearing and work
Choose the optimal mixture of quantity and quality of children
Consume
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Individuals
Live for 2 period
Childhood: (1st Period):
Consume a fraction of their parental unit-time endowment
The required time increases with children’s quality
time required to raise a child, regardless of quality
time needed to raise a child with education et+1
+ et+1
Parenthood (2nd Period):
Allocate time between childrearing and work
Choose the optimal mixture of quantity and quality of children
Consume
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Individuals
Live for 2 period
Childhood: (1st Period):
Consume a fraction of their parental unit-time endowment
The required time increases with children’s quality
time required to raise a child, regardless of quality
time needed to raise a child with education et+1
+ et+1
Parenthood (2nd Period):
Allocate time between childrearing and work
Choose the optimal mixture of quantity and quality of children
Consume
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Individuals
Live for 2 period
Childhood: (1st Period):
Consume a fraction of their parental unit-time endowment
The required time increases with children’s quality
time required to raise a child, regardless of quality
time needed to raise a child with education et+1
+ et+1
Parenthood (2nd Period):
Allocate time between childrearing and work
Choose the optimal mixture of quantity and quality of children
Consume
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Preferences
The utility function of individual t
u t = (1
ct
nt
ht+1
) ln(ct ) + ln(nt ht+1 )
consumption of individual t
number of children of individual t
level of human capital of each child
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Preferences
The utility function of individual t
u t = (1
ct
nt
ht+1
) ln(ct ) + ln(nt ht+1 )
consumption of individual t
number of children of individual t
level of human capital of each child
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Preferences
The utility function of individual t
u t = (1
ct
nt
ht+1
) ln(ct ) + ln(nt ht+1 )
consumption of individual t
number of children of individual t
level of human capital of each child
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Preferences
The utility function of individual t
u t = (1
ct
nt
ht+1
) ln(ct ) + ln(nt ht+1 )
consumption of individual t
number of children of individual t
level of human capital of each child
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Preferences
The utility function of individual t
u t = (1
ct
nt
ht+1
) ln(ct ) + ln(nt ht+1 )
consumption of individual t
number of children of individual t
level of human capital of each child
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Preferences
The utility function of individual t
u t = (1
ct
nt
ht+1
) ln(ct ) + ln(nt ht+1 )
consumption of individual t
number of children of individual t
level of human capital of each child
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Optimization: Income Expansion Path
Time Devoted to
Raising Children
Subsistence
Consumption
γ
Income Expansion
Path
τ
c~
Consumption
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Income Expansion Path - Malthusian Epoch
Time Devoted to
Raising Children
Subsistence
Consumption
γ
Income Expansion
Path
τ
c~
Consumption
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Income Expansion Path - Malthusian Epoch
Time Devoted to
Raising Children
Subsistence
Consumption
γ
Income Expansion
Path
τ
c~
Consumption
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Income Expansion Path - Malthusian Epoch
Time Devoted to
Raising Children
Subsistence
Consumption
γ
Income Expansion
Path
τ
c~
Consumption
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Income Expansion Path - Malthusian Epoch
Time Devoted to
Raising Children
Subsistence
Consumption
γ
Income Expansion
Path
τ
c~
Consumption
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Income Expansion Path - Malthusian Epoch
Time Devoted to
Raising Children
Subsistence
Consumption
γ
Income Expansion
Path
τ
c~
Consumption
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Income Expansion Path - Malthusian Epoch
Time Devoted to
Raising Children
Subsistence
Consumption
γ
Income Expansion
Path
τ
c~
Consumption
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Income Expansion Path - Malthusian Epoch
Time Devoted to
Raising Children
Subsistence
Consumption
γ
Income Expansion
Path
τ
c~
Consumption
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Income Expansion Path - Post-Demographic Transition
Time Devoted to
Raising Children
Subsistence
Consumption
γ
Income Expansion
Path
τ
c~
Consumption
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Income Expansion Path - Post-Demographic Transition
Time Devoted to
Raising Children
Subsistence
Consumption
γ
Income Expansion
Path
τ
c~
Consumption
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Optimal Investment in Child Quality
et +1
et +1 = e( gt +1 )
gˆ
g t +1
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Dynamical System
A sequence fxt ; et ; gt ; Lt g1
t=0 such that:
8
xt+1 = (et ; gt ; xt ; Lt )xt
>
>
>
>
>
>
>
< et+1 = e(g (et ; Lt ))
>
>
gt+1 = g (et ; Lt )
>
>
>
>
>
:
Lt+1 = n(et ; gt ; xt ; Lt )Lt
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Conditional Evolution of Technology and Education
A sequence fgt ; et ; Lg1
t=0 such that:
8
< gt+1 = g (et ; L)
:
et+1 = e(gt+1 )
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Evolution of Education and Technology
gt
et +1 = e( gt +1 )
g t +1 = g (et ; L1 )
g l(L1 )
et
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Evolution of Education and Technology
gt
et +1 = e( gt +1 )
g t +1 = g (et ; L2 )
g l(L2 )
et
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Evolution of Education and Technology
gt
et +1 = e( gt +1 )
g t +1 = g (et ; L3 )
g l (L3 )
et
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Evolution of Education and Technology
gt
l
g
h
g
u
et +1 = e( g t +1 )
g t +1 = g (et ; L4 )
g (L )
4
e
u
e
Oded Galor
h
et
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Evolution of Education and Technology
gt
g
h
g
u
et +1 = e( g t +1 )
g t +1 = g (et ; L5 )
e
Oded Galor
h
et
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Evolution of Education and Resources Per Worker: Small Population
xt
EE
x t +1 = x t
Conditional Malthusian
Frontier
x l (L)
eˆL
( )
Oded Galor
et
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Evolution of Education and Resources Per Worker: Intermediate Population
EE
xt
EE
x t +1 = x t
EE
x l (L)
Conditional Malthusian
Frontier
eu (L)
eˆL
( )
Oded Galor
e h (L)
et
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
The Evolution of Education and Resources Per Worker: Large Population
xt
x t +1 = x t
EE
Conditional Malthusian
Frontier
e h (L)
eˆL
( )
Oded Galor
et
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Calibrations
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Implications
The transition from stagnation to growth is an inevitable byproduct of the process of development
The inherent Malthusian interaction between technology and
population, accelerated the pace of technological progress, and
eventually brought an industrial demand for human capital
Human capital formation, triggered a demographic transition,
enabling economies to convert a larger share of the fruits of
factor accumulation and technological progress into growth of
income per capita
Variations in the timing of the take-o¤ contributed signi…cantly
to the divergence in income per capita in the past two centuries
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Implications
The transition from stagnation to growth is an inevitable byproduct of the process of development
The inherent Malthusian interaction between technology and
population, accelerated the pace of technological progress, and
eventually brought an industrial demand for human capital
Human capital formation, triggered a demographic transition,
enabling economies to convert a larger share of the fruits of
factor accumulation and technological progress into growth of
income per capita
Variations in the timing of the take-o¤ contributed signi…cantly
to the divergence in income per capita in the past two centuries
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Implications
The transition from stagnation to growth is an inevitable byproduct of the process of development
The inherent Malthusian interaction between technology and
population, accelerated the pace of technological progress, and
eventually brought an industrial demand for human capital
Human capital formation, triggered a demographic transition,
enabling economies to convert a larger share of the fruits of
factor accumulation and technological progress into growth of
income per capita
Variations in the timing of the take-o¤ contributed signi…cantly
to the divergence in income per capita in the past two centuries
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Implications
The transition from stagnation to growth is an inevitable byproduct of the process of development
The inherent Malthusian interaction between technology and
population, accelerated the pace of technological progress, and
eventually brought an industrial demand for human capital
Human capital formation, triggered a demographic transition,
enabling economies to convert a larger share of the fruits of
factor accumulation and technological progress into growth of
income per capita
Variations in the timing of the take-o¤ contributed signi…cantly
to the divergence in income per capita in the past two centuries
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
The Dynamical System
Calibrations
Implications
Implications
The transition from stagnation to growth is an inevitable byproduct of the process of development
The inherent Malthusian interaction between technology and
population, accelerated the pace of technological progress, and
eventually brought an industrial demand for human capital
Human capital formation, triggered a demographic transition,
enabling economies to convert a larger share of the fruits of
factor accumulation and technological progress into growth of
income per capita
Variations in the timing of the take-o¤ contributed signi…cantly
to the divergence in income per capita in the past two centuries
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Implications for the Comparative Development
Di¤erences in the economic performance across countries re‡ect:
Variations in country-speci…c characteristics that a¤ect:
The pace of technological progress
The intensity of human capital formation
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Implications for the Comparative Development
Di¤erences in the economic performance across countries re‡ect:
Variations in country-speci…c characteristics that a¤ect:
The pace of technological progress
The intensity of human capital formation
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Implications for the Comparative Development
Di¤erences in the economic performance across countries re‡ect:
Variations in country-speci…c characteristics that a¤ect:
The pace of technological progress
The intensity of human capital formation
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Implications for the Comparative Development
Di¤erences in the economic performance across countries re‡ect:
Variations in country-speci…c characteristics that a¤ect:
The pace of technological progress
The intensity of human capital formation
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Implications for the Comparative Development
Di¤erences in the economic performance across countries re‡ect:
Variations in country-speci…c characteristics that a¤ect:
The pace of technological progress
The intensity of human capital formation
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Country-Speci…c Characteristics Conducive for Technological Progress
i
gt+1
= g (eti ; Lit ;
i
t
i
t)
characteristics a¤ecting tech progress in country i :
Protection of intellectual property rights (policy)
The stock of knowledge within a society
The propensity of a country to trade (geography & policy)
Technological di¤usion
Specialization and technological progress via learning by doing
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Country-Speci…c Characteristics Conducive for Technological Progress
i
gt+1
= g (eti ; Lit ;
i
t
i
t)
characteristics a¤ecting tech progress in country i :
Protection of intellectual property rights (policy)
The stock of knowledge within a society
The propensity of a country to trade (geography & policy)
Technological di¤usion
Specialization and technological progress via learning by doing
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Country-Speci…c Characteristics Conducive for Technological Progress
i
gt+1
= g (eti ; Lit ;
i
t
i
t)
characteristics a¤ecting tech progress in country i :
Protection of intellectual property rights (policy)
The stock of knowledge within a society
The propensity of a country to trade (geography & policy)
Technological di¤usion
Specialization and technological progress via learning by doing
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Country-Speci…c Characteristics Conducive for Technological Progress
i
gt+1
= g (eti ; Lit ;
i
t
i
t)
characteristics a¤ecting tech progress in country i :
Protection of intellectual property rights (policy)
The stock of knowledge within a society
The propensity of a country to trade (geography & policy)
Technological di¤usion
Specialization and technological progress via learning by doing
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Country-Speci…c Characteristics Conducive for Technological Progress
i
gt+1
= g (eti ; Lit ;
i
t
i
t)
characteristics a¤ecting tech progress in country i :
Protection of intellectual property rights (policy)
The stock of knowledge within a society
The propensity of a country to trade (geography & policy)
Technological di¤usion
Specialization and technological progress via learning by doing
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Country-Speci…c Characteristics Conducive for Technological Progress
i
gt+1
= g (eti ; Lit ;
i
t
i
t)
characteristics a¤ecting tech progress in country i :
Protection of intellectual property rights (policy)
The stock of knowledge within a society
The propensity of a country to trade (geography & policy)
Technological di¤usion
Specialization and technological progress via learning by doing
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Country-Speci…c Characteristics Conducive for Technological Progress
i
gt+1
= g (eti ; Lit ;
i
t
i
t)
characteristics a¤ecting tech progress in country i :
Protection of intellectual property rights (policy)
The stock of knowledge within a society
The propensity of a country to trade (geography & policy)
Technological di¤usion
Specialization and technological progress via learning by doing
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Country-Speci…c Characteristics Conducive for Technological Progress
i
gt+1
= g (eti ; Lit ;
i
t
i
t)
characteristics a¤ecting tech progress in country i :
Protection of intellectual property rights (policy)
The stock of knowledge within a society
The propensity of a country to trade (geography & policy)
Technological di¤usion
Specialization and technological progress via learning by doing
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Country-Speci…c Characteristics Conducive for Technological Progress
Cultural and religious composition in society
Attitude toward knowledge creation and di¤usion (e.g., The
Inquisition)
The composition of interest groups in society
Incentives to block or promote technological innovation (e.g.,
Luddites, landowners)
Cultural and genetic diversity
Wider spectrum of traits are more likely to contain the ones
complementary to the adoption or implementation of new
technologies
Abundance of natural resources
complementary for a looming technological paradigm (e.g.,
Coal & Steam engine)
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Country-Speci…c Characteristics Conducive for Technological Progress
Cultural and religious composition in society
Attitude toward knowledge creation and di¤usion (e.g., The
Inquisition)
The composition of interest groups in society
Incentives to block or promote technological innovation (e.g.,
Luddites, landowners)
Cultural and genetic diversity
Wider spectrum of traits are more likely to contain the ones
complementary to the adoption or implementation of new
technologies
Abundance of natural resources
complementary for a looming technological paradigm (e.g.,
Coal & Steam engine)
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Country-Speci…c Characteristics Conducive for Technological Progress
Cultural and religious composition in society
Attitude toward knowledge creation and di¤usion (e.g., The
Inquisition)
The composition of interest groups in society
Incentives to block or promote technological innovation (e.g.,
Luddites, landowners)
Cultural and genetic diversity
Wider spectrum of traits are more likely to contain the ones
complementary to the adoption or implementation of new
technologies
Abundance of natural resources
complementary for a looming technological paradigm (e.g.,
Coal & Steam engine)
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Country-Speci…c Characteristics Conducive for Technological Progress
Cultural and religious composition in society
Attitude toward knowledge creation and di¤usion (e.g., The
Inquisition)
The composition of interest groups in society
Incentives to block or promote technological innovation (e.g.,
Luddites, landowners)
Cultural and genetic diversity
Wider spectrum of traits are more likely to contain the ones
complementary to the adoption or implementation of new
technologies
Abundance of natural resources
complementary for a looming technological paradigm (e.g.,
Coal & Steam engine)
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Country-Speci…c Characteristics Conducive for Technological Progress
Cultural and religious composition in society
Attitude toward knowledge creation and di¤usion (e.g., The
Inquisition)
The composition of interest groups in society
Incentives to block or promote technological innovation (e.g.,
Luddites, landowners)
Cultural and genetic diversity
Wider spectrum of traits are more likely to contain the ones
complementary to the adoption or implementation of new
technologies
Abundance of natural resources
complementary for a looming technological paradigm (e.g.,
Coal & Steam engine)
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Country-Speci…c Characteristics Conducive for Technological Progress
Cultural and religious composition in society
Attitude toward knowledge creation and di¤usion (e.g., The
Inquisition)
The composition of interest groups in society
Incentives to block or promote technological innovation (e.g.,
Luddites, landowners)
Cultural and genetic diversity
Wider spectrum of traits are more likely to contain the ones
complementary to the adoption or implementation of new
technologies
Abundance of natural resources
complementary for a looming technological paradigm (e.g.,
Coal & Steam engine)
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variation in Characteristics Conducive for Human Capital Formation
For country-speci…c characteristics
i
et+1
=
e(g it+1 ;
i
t)
8
< =0
:
Oded Galor
>0
[ it ;
i
t
i]
t
if
i
gt+1
if
i >g
gt+1
^(
g^ (
i
t );
i
t)
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variation in Characteristics Conducive for Human Capital Formation
For country-speci…c characteristics
i
et+1
=
e(g it+1 ;
i
t)
8
< =0
:
Oded Galor
>0
[ it ;
i
t
i]
t
if
i
gt+1
if
i >g
gt+1
^(
g^ (
i
t );
i
t)
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variation in Characteristics Conducive for Human Capital Formation
For country-speci…c characteristics
i
et+1
=
e(g it+1 ;
i
t)
8
< =0
:
Oded Galor
>0
[ it ;
i
t
i]
t
if
i
gt+1
if
i >g
gt+1
^(
g^ (
i
t );
i
t)
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Characteristics that Promote Human Capital Formation
Ability of individuals to …nance the cost of education and the
forgone earnings
Extent of under-investment in education
The availability, accessibility, and quality of public education (policy
& interest groups)
Extent of human capital formation
Cultural and religious composition in society
Attitude towards education a¤ect the availability, quality and
desirability of education
The stock of knowledge in society
Productivity of human capital formation
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Characteristics that Promote Human Capital Formation
Ability of individuals to …nance the cost of education and the
forgone earnings
Extent of under-investment in education
The availability, accessibility, and quality of public education (policy
& interest groups)
Extent of human capital formation
Cultural and religious composition in society
Attitude towards education a¤ect the availability, quality and
desirability of education
The stock of knowledge in society
Productivity of human capital formation
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Characteristics that Promote Human Capital Formation
Ability of individuals to …nance the cost of education and the
forgone earnings
Extent of under-investment in education
The availability, accessibility, and quality of public education (policy
& interest groups)
Extent of human capital formation
Cultural and religious composition in society
Attitude towards education a¤ect the availability, quality and
desirability of education
The stock of knowledge in society
Productivity of human capital formation
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Characteristics that Promote Human Capital Formation
Ability of individuals to …nance the cost of education and the
forgone earnings
Extent of under-investment in education
The availability, accessibility, and quality of public education (policy
& interest groups)
Extent of human capital formation
Cultural and religious composition in society
Attitude towards education a¤ect the availability, quality and
desirability of education
The stock of knowledge in society
Productivity of human capital formation
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Characteristics that Promote Human Capital Formation
Ability of individuals to …nance the cost of education and the
forgone earnings
Extent of under-investment in education
The availability, accessibility, and quality of public education (policy
& interest groups)
Extent of human capital formation
Cultural and religious composition in society
Attitude towards education a¤ect the availability, quality and
desirability of education
The stock of knowledge in society
Productivity of human capital formation
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Characteristics that Promote Human Capital Formation
Ability of individuals to …nance the cost of education and the
forgone earnings
Extent of under-investment in education
The availability, accessibility, and quality of public education (policy
& interest groups)
Extent of human capital formation
Cultural and religious composition in society
Attitude towards education a¤ect the availability, quality and
desirability of education
The stock of knowledge in society
Productivity of human capital formation
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Characteristics that Promote Human Capital Formation
Ability of individuals to …nance the cost of education and the
forgone earnings
Extent of under-investment in education
The availability, accessibility, and quality of public education (policy
& interest groups)
Extent of human capital formation
Cultural and religious composition in society
Attitude towards education a¤ect the availability, quality and
desirability of education
The stock of knowledge in society
Productivity of human capital formation
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Characteristics that Promote Human Capital Formation
Ability of individuals to …nance the cost of education and the
forgone earnings
Extent of under-investment in education
The availability, accessibility, and quality of public education (policy
& interest groups)
Extent of human capital formation
Cultural and religious composition in society
Attitude towards education a¤ect the availability, quality and
desirability of education
The stock of knowledge in society
Productivity of human capital formation
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Characteristics that Promote Human Capital Formation
Ability of individuals to …nance the cost of education and the
forgone earnings
Extent of under-investment in education
The availability, accessibility, and quality of public education (policy
& interest groups)
Extent of human capital formation
Cultural and religious composition in society
Attitude towards education a¤ect the availability, quality and
desirability of education
The stock of knowledge in society
Productivity of human capital formation
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Characteristics that Promote Human Capital Formation
The propensity of a country to trade
Skill-intensity in production and its e¤ect on the demand for
human capital
The e¤ect of geographical attributes on health
Return to investment in human capital (e.g., Malaria,
Hookworm)
Composition of religious groups within a society and their attitude
towards literacy (e.g., Judaism, Protestantism)
Social status associated with education
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Characteristics that Promote Human Capital Formation
The propensity of a country to trade
Skill-intensity in production and its e¤ect on the demand for
human capital
The e¤ect of geographical attributes on health
Return to investment in human capital (e.g., Malaria,
Hookworm)
Composition of religious groups within a society and their attitude
towards literacy (e.g., Judaism, Protestantism)
Social status associated with education
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Characteristics that Promote Human Capital Formation
The propensity of a country to trade
Skill-intensity in production and its e¤ect on the demand for
human capital
The e¤ect of geographical attributes on health
Return to investment in human capital (e.g., Malaria,
Hookworm)
Composition of religious groups within a society and their attitude
towards literacy (e.g., Judaism, Protestantism)
Social status associated with education
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Characteristics that Promote Human Capital Formation
The propensity of a country to trade
Skill-intensity in production and its e¤ect on the demand for
human capital
The e¤ect of geographical attributes on health
Return to investment in human capital (e.g., Malaria,
Hookworm)
Composition of religious groups within a society and their attitude
towards literacy (e.g., Judaism, Protestantism)
Social status associated with education
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Characteristics that Promote Human Capital Formation
The propensity of a country to trade
Skill-intensity in production and its e¤ect on the demand for
human capital
The e¤ect of geographical attributes on health
Return to investment in human capital (e.g., Malaria,
Hookworm)
Composition of religious groups within a society and their attitude
towards literacy (e.g., Judaism, Protestantism)
Social status associated with education
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Characteristics that Promote Human Capital Formation
The propensity of a country to trade
Skill-intensity in production and its e¤ect on the demand for
human capital
The e¤ect of geographical attributes on health
Return to investment in human capital (e.g., Malaria,
Hookworm)
Composition of religious groups within a society and their attitude
towards literacy (e.g., Judaism, Protestantism)
Social status associated with education
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Characteristics that Stimulate Technological Progress
eti+1 = e( gti+1; Ψ )
g ti
gtB+1 = g (etB ; L, Ω B )
gtA+1 = g (etA ; L, Ω A )
gˆΨ
( )
g l ( L, Ω B )
g l ( L, Ω A )
eti
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Earlier Take-o¤ in Country B
eti+1 = e( gti+1; Ψ )
g
i
t
gtB+1 = g (etB ; L, Ω B )
gtA+1 = g (etA ; L, Ω A )
gˆΨ
( )
g l ( L, Ω A )
e h ( L, Ω B , Ψ )
Oded Galor
eti
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Variations in Characteristics that Stimulate Human Capital Formation
etA+1 = e( g tA+1 ; Ψ A )
g ti
etB+1 = e( g tB+1 ; Ψ B )
gti+1 = g (eti ; L, Ω)
gˆ(Ψ A )
gˆ(Ψ B )
g l ( L, Ω )
eti
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Earlier Take-o¤ in Country B
etA+1 = e( g tA+1 ; Ψ A )
g ti
etB+1 = e( g tB+1 ; Ψ B )
gti+1 = g (eti ; L, Ω)
gˆ(Ψ A )
g l ( L, Ω )
gˆ(Ψ B )
e h ( L, Ω, Ψ B )
Oded Galor
eti
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
The Long Shadow of History – The Out of Africa Hypothesis and Comparative
Development
Variation in migratory distance from East Africa to
settlements across the globe
=) genetic diversity =) comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
The Long Shadow of History – The Out of Africa Hypothesis and Comparative
Development
Variation in migratory distance from East Africa to
settlements across the globe
=) genetic diversity =) comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Main Building Blocks of the Proposed Hypothesis
The Serial-Founder E¤ect: Lower genetic diversity exists among
indigenous populations at greater migratory distances from east
Africa
Genetic diversity within a society generates a hump-shaped
e¤ect on development outcomes
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Main Building Blocks of the Proposed Hypothesis
The Serial-Founder E¤ect: Lower genetic diversity exists among
indigenous populations at greater migratory distances from east
Africa
Genetic diversity within a society generates a hump-shaped
e¤ect on development outcomes
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
The HGDP Ethnic Groups
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Migratory Distance from East Africa
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Evidence of the Serial-Founder E¤ect
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Diversity and Economic Development
Genetic diversity within a society generates costs and bene…ts:
Costs: diversity reduces the likelihood of cooperative or
trustful behavior
=) GD generates ine¢ ciencies in the operation of
the economy relative to its PPF
Bene…ts: wider spectrum of traits is likely to be complementary to
the adoption or implementation of new technologies
Variety permits specialization in complementary tasks
Greater variance of cognitive traits increases innovations
in an environment in which only high levels of cognitive
abilities contribute to technological innovation
=) GD enhances, productivity, knowledge creation
and fosters technological progress
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Diversity and Economic Development
Genetic diversity within a society generates costs and bene…ts:
Costs: diversity reduces the likelihood of cooperative or
trustful behavior
=) GD generates ine¢ ciencies in the operation of
the economy relative to its PPF
Bene…ts: wider spectrum of traits is likely to be complementary to
the adoption or implementation of new technologies
Variety permits specialization in complementary tasks
Greater variance of cognitive traits increases innovations
in an environment in which only high levels of cognitive
abilities contribute to technological innovation
=) GD enhances, productivity, knowledge creation
and fosters technological progress
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Diversity and Economic Development
Genetic diversity within a society generates costs and bene…ts:
Costs: diversity reduces the likelihood of cooperative or
trustful behavior
=) GD generates ine¢ ciencies in the operation of
the economy relative to its PPF
Bene…ts: wider spectrum of traits is likely to be complementary to
the adoption or implementation of new technologies
Variety permits specialization in complementary tasks
Greater variance of cognitive traits increases innovations
in an environment in which only high levels of cognitive
abilities contribute to technological innovation
=) GD enhances, productivity, knowledge creation
and fosters technological progress
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Diversity and Economic Development
Genetic diversity within a society generates costs and bene…ts:
Costs: diversity reduces the likelihood of cooperative or
trustful behavior
=) GD generates ine¢ ciencies in the operation of
the economy relative to its PPF
Bene…ts: wider spectrum of traits is likely to be complementary to
the adoption or implementation of new technologies
Variety permits specialization in complementary tasks
Greater variance of cognitive traits increases innovations
in an environment in which only high levels of cognitive
abilities contribute to technological innovation
=) GD enhances, productivity, knowledge creation
and fosters technological progress
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Diversity and Economic Development
Genetic diversity within a society generates costs and bene…ts:
Costs: diversity reduces the likelihood of cooperative or
trustful behavior
=) GD generates ine¢ ciencies in the operation of
the economy relative to its PPF
Bene…ts: wider spectrum of traits is likely to be complementary to
the adoption or implementation of new technologies
Variety permits specialization in complementary tasks
Greater variance of cognitive traits increases innovations
in an environment in which only high levels of cognitive
abilities contribute to technological innovation
=) GD enhances, productivity, knowledge creation
and fosters technological progress
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Diversity and Economic Development
Genetic diversity within a society generates costs and bene…ts:
Costs: diversity reduces the likelihood of cooperative or
trustful behavior
=) GD generates ine¢ ciencies in the operation of
the economy relative to its PPF
Bene…ts: wider spectrum of traits is likely to be complementary to
the adoption or implementation of new technologies
Variety permits specialization in complementary tasks
Greater variance of cognitive traits increases innovations
in an environment in which only high levels of cognitive
abilities contribute to technological innovation
=) GD enhances, productivity, knowledge creation
and fosters technological progress
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Diversity and Economic Development
Genetic diversity within a society generates costs and bene…ts:
Costs: diversity reduces the likelihood of cooperative or
trustful behavior
=) GD generates ine¢ ciencies in the operation of
the economy relative to its PPF
Bene…ts: wider spectrum of traits is likely to be complementary to
the adoption or implementation of new technologies
Variety permits specialization in complementary tasks
Greater variance of cognitive traits increases innovations
in an environment in which only high levels of cognitive
abilities contribute to technological innovation
=) GD enhances, productivity, knowledge creation
and fosters technological progress
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Optimal Diversity
Diminishing marginal bene…ts of diversity & homogeneity
=) A hump-shaped relationship across populations
between genetic diversity and development outcomes
=) Higher optimal level of diversity in the
post-industrialization environment of rapid technological
change
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Optimal Diversity
Diminishing marginal bene…ts of diversity & homogeneity
=) A hump-shaped relationship across populations
between genetic diversity and development outcomes
=) Higher optimal level of diversity in the
post-industrialization environment of rapid technological
change
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Optimal Diversity
Diminishing marginal bene…ts of diversity & homogeneity
=) A hump-shaped relationship across populations
between genetic diversity and development outcomes
=) Higher optimal level of diversity in the
post-industrialization environment of rapid technological
change
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Theoretical Foundations of the Hump-Shaped E¤ect of Diversity
y (ω )
0
ω*
Oded Galor
1
ω
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Predicted Diversity and Comparative Development in 1500 CE
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Diversity and Comparative Development in 2000
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Interpretations - Comparative Development in 2000
Optimal GD = 0.7208
GD in US = 0.7206
Increasing the diversity of the most homogenous country (Bolivia;
0.6309) to that of the US =) raise income per capita by a factor
of 5.4 (increasing income in Bolivia from 9% to 40% of that of the
US)
Decreasing the diversity of the most heterogenous country
(Ethiopia; 0.7743) to that of the US =) raise income per capita
by a factor of 1.7 (increasing income in Ethiopia from 2% to 4% of
that of the US)
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Interpretations - Comparative Development in 2000
Optimal GD = 0.7208
GD in US = 0.7206
Increasing the diversity of the most homogenous country (Bolivia;
0.6309) to that of the US =) raise income per capita by a factor
of 5.4 (increasing income in Bolivia from 9% to 40% of that of the
US)
Decreasing the diversity of the most heterogenous country
(Ethiopia; 0.7743) to that of the US =) raise income per capita
by a factor of 1.7 (increasing income in Ethiopia from 2% to 4% of
that of the US)
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Interpretations - Comparative Development in 2000
Optimal GD = 0.7208
GD in US = 0.7206
Increasing the diversity of the most homogenous country (Bolivia;
0.6309) to that of the US =) raise income per capita by a factor
of 5.4 (increasing income in Bolivia from 9% to 40% of that of the
US)
Decreasing the diversity of the most heterogenous country
(Ethiopia; 0.7743) to that of the US =) raise income per capita
by a factor of 1.7 (increasing income in Ethiopia from 2% to 4% of
that of the US)
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Uni…ed Growth Theory
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Concluding Remarks
UGT encompasses existing hypothesis about the e¤ect of
geography
institutions and cultural factors
composition of human traits
on:
the pace of the transition from stagnation to growth
comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Concluding Remarks
UGT encompasses existing hypothesis about the e¤ect of
geography
institutions and cultural factors
composition of human traits
on:
the pace of the transition from stagnation to growth
comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Concluding Remarks
UGT encompasses existing hypothesis about the e¤ect of
geography
institutions and cultural factors
composition of human traits
on:
the pace of the transition from stagnation to growth
comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Concluding Remarks
UGT encompasses existing hypothesis about the e¤ect of
geography
institutions and cultural factors
composition of human traits
on:
the pace of the transition from stagnation to growth
comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Concluding Remarks
UGT encompasses existing hypothesis about the e¤ect of
geography
institutions and cultural factors
composition of human traits
on:
the pace of the transition from stagnation to growth
comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Concluding Remarks
UGT encompasses existing hypothesis about the e¤ect of
geography
institutions and cultural factors
composition of human traits
on:
the pace of the transition from stagnation to growth
comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Concluding Remarks
UGT encompasses existing hypothesis about the e¤ect of
geography
institutions and cultural factors
composition of human traits
on:
the pace of the transition from stagnation to growth
comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development
From Stagnation to Growth
Uni…ed Growth Theory
UGT: Modeling
UGT and Comparative Development
Country-Speci…c Characteristics & Technological Progress
Country-Speci…c Characteristics & Human Capital Formation
The Long Shadow of History on Comparative Development
Concluding Remarks
UGT encompasses existing hypothesis about the e¤ect of
geography
institutions and cultural factors
composition of human traits
on:
the pace of the transition from stagnation to growth
comparative development
Oded Galor
Uni…ed Growth Theory and Comparative Economic Development