Economic Growth: New

The Guts of a GUT: Elements of a Grand Unified Theory of Growth. The Albert Hirschman lecture at the 2010 LACEA meetings (additional material on the "economic growth" page). This is an attempt to bring together the body of work around the lack of persistence of growth and hence episodes of boom and bust with the work on policy implementation and feedback loops from economic structure to "institutions" and policy implementation starting from weak institutions and "deals" based policy implementation.

In this paper I document four facts of growth, two of which generated a set of interesting graphs.

GUTS supporting material. This set of graphs generalizes the point made on the cover of Charles Jones' book about economic growth by showing the incredible stability of long-run growth in the USA. I use Maddison's data for the 16 leading countries to show that growth rates estimated on some period between 1890 and 1929 (where the period is chosen optimally) can generally predict 2003 GDP per capita to within a few percentage points (the median prediction error is only 3.9 percent). This is the graph for Denmark

GUTS supporting material. This is another set of graphs--one for every country in the data--that show that countries have growth "phases" and that economic growth varies widely for each country. I calculate uaing the PWT6.3 data all possible five year growth rates in the data and then "bin" those into categories (separated by 2 ppa). Each graph compares the distribution of growth rates for a given country against the distribution of all countries in the world. These graphs show that while some countries, such as the US or UK are consistently in the "moderate" growth region, other countries, like the graph for Ghana (here) actually have growth episodes more dispersed than the world as a whole.