There are many houses in the house of growth

December 10, 2010

Recently I was reminded of the distinction made by Joel Mokyr, in the Lever of Riches, between the four types of growth:

  1. The Solovian growth, after Robert Solow, which is driven by an increase of the saving rate leading to more investment and thus a jump of the production per unit of labor.
  2. The Smithian growth, after you know who, which is driven by the positive feedback between the gain from trade and division of labor (specialization).
  3. The Boserupian growth, after Ester Bosrup, when demographic expansion leads to positive size effects once some thresholds have been reach.
  4. The Schumpeterian growth, after Joseph Schumpeter, where an increase in the stock of knowledge applied to economic production leads to to the increase of the said production.

Meet the gang:


Coates J., Gurnell M. & Rustichini A. (2009) Girls can’t trade

November 26, 2009

Coates, John M., Mark Gurnell and Aldo Rustichini (2009) Second-to-fourth digit ratio predicts success among high-frequency financial traders. Proceedings of the National Academy of Science, 106/2: 623-8.

Introduction

What does traders’ success on the market floor depend on? Earlier studies have shown that one’s level of testosterone did affect one’s daily results. Since “prenatal androgens have organizing effects on the developing brain, increasing its later sensitivity to […] testosterone”, it would make sense that prenatal androgens also have a structural effect on a trader’s results on the long term. Read the rest of this entry »


Saad G. & Vongas J. (2009) What bling really does to you

November 25, 2009

Saad, Gad and John G. Vongas (2009) The effect of conspicuous consumption on men’s testosterone levels. Organizational Behavior and Human Decision Processes, 110/2: 80-92.


Introduction (longue one)

Thorstein Veblen coined the expression conspicuous consumption in 1899 to refer to goods which principal aim was to be displayed, advertise one’s wealth and impress one’s peers (p.80). In other words, it makes one’s fortune obvious by stressing one’s ability to waste. Read the rest of this entry »


False economy

April 14, 2009

Good review from the FT, found via A New Start:

False Economy: A Surprising Economic History of the World
By Alan Beattie
Riverhead $26.95 336 pages
Published in the UK in June

False Economy is a book about how economic triumphs and disasters have shaped the world – and why it’s so hard to change the course of history once decisions have been made. The book’s central idea is that our smart or stupid choices determine whether a country’s economic development is successful – but that success is still often a surprise.

The reader has to work to arrive at this or any other central idea, however. For much of this fascinating but sometimes maddening book, Alan Beattie, the FT’s world trade editor, seems to follow Mark Twain’s famous preface to The Adventures of Huckleberry Finn: “Persons attempting to find a motive in this narrative will be prosecuted; persons attempting to find a moral in it will be banished; persons attempting to find a plot in it will be shot.” Read the rest of this entry »


Krugman P. (1991) Geography and trade

March 31, 2009

Krugman, Paul (1991) Geography and trade, London: MIT Press/Leuven UP, p.142.

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Introduction

Economic geography is devoted to understand the location of production in space, in other words where things happen in relation to one another (p.1). Economists ought to remember that countries both occupy and exist in space (p.2). “To say anything useful or interesting about the location of economic activity in space, it is necessary to get away from the constant-returns, perfect-competition approach that still dominates most economy analysis”, and use such notions as increasing returns and imperfect competition (p.4). Read the rest of this entry »


North D.C. (1959) Agriculture and economic growth

March 20, 2009

North, Douglass C. (1959) “Agriculture and Regional Economic Growth”, Journal of Farm Economics, 41/5, 943-951.

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Introduction
“There seems to be agreement amongst economist that agriculture contributes little to economic growth”. Worse it may even delay development as agricultural comparative advantage may attract production factors away from the most moderns sectors of the economy. At best, progress in agriculture is seen as a consequence rather than a cause of urban and industrial development (p.943). But the author argues that “the successful production of agricultural (or indeed most extractive) commodities for sale [outside of] the region can be and under certain conditions has been the prime influence inducing economic growth […] and eventually industrial development”. Read the rest of this entry »


Kanazawa S. (2004) The Savannah Principle

February 15, 2009

Kanazawa, Satoshi (2004) “The Savanna Principle”, Managerial and Decision Economics, 25/1, 41-54.

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Introduction

Models designed and used by microeconomists commonly fail to predict actual human behaviours (p.41). The author proposes to use Evolutionary Psychology (EP) to overcome these shortfalls. Unlike Evolutionary Economics which deals mostly with the evolution of strategies and organizations, EP uses the substance of Darwinism, instead of merely mimicking its principles. Read the rest of this entry »