Monday Growth Links

Time to clear the decks on the reading list:

  • Jerry Hough and Robin Grier have a new book on "The Long Process of Development". They stress that institutional change, and the economic development that may or may not follow, takes a looooooooong time. It is in the reading pile for the summer.
  • Edited volume by Grief, Kiesling, and Nye on "Institutions, Innovation, and Industrialization". Also on the summer reading list. If you're going to study the importance of institutions for economic growth, this is what you want to be reading rather than papers using cross-country regressions based on arbitrary indices of institutional quality. Not that I have a thing about that.
  • Interesting bit on how Nairobi is "in the wrong place". Given my recent work on urbanization and growth, I found this fascinating. Cities, in some sense, solve coordination problems. If we all agree to show up *here*, then we can all work together. So once a city is in place, it is almost impossible to change that location. History matters.
  • An excellent post by Jesse Ausubel on how nature is "coming back" in America as the economy grows. We are actively returning land to wilderness from agriculture/industrial use. Really simple to understand, in some sense. If we all have preferences over "stuff" and "nature", then as the economy gets really good at producing "stuff" the marginal utility of that "stuff" becomes very low, and so we start buying more "nature" (by buying less stuff).
  • A long post on the Hajnal Line, by the HBD Chick. Essentially, run a line from St. Petersburg to Trieste (near Venice). Hajnal differentiated family patterns west of that line from those east. But as the HBD Chick capably documents, there are lots of cultural and social factors that differ along this same line. One theory has been that this is the extent of the cultural influence of the Paris Basin. A different theory is that this captures some geographic difference between these regions that led to the cultural differences. Whatever it is, it's a neat summary of how much breaks along that line.
  • Short post by Marc Bellemare on the (mis)use of instrumental variables. This is particularly relevant to growth research, which often strays into assuming anything geographic is a suitable IV for almost anything else (it's exogneous!). As Bellemare points out, while geography is subject to reverse causality, that doesn't mean your regression doesn't have omitted variable bias or measurement error.
  • Manufacturing with Factories. Tim Taylor talks about a short paper by Bernard and Fort on "factoryless goods producing firms". Think Apple, who designs everything in the US, but produces almost nothing in the US (although I think they are opening a plant in Texas?). In one sense, the US manufacturing sector is much larger than reported in BEA statistics, because Apple's output is not recorded as manufacturing, but as wholesale trade. The actual snapping together of iPhones is small potatoes relative to the overall value-added of Apple.
  • A great post by Rachel Laudan on "culinary Luddism" (which is such a great phrase). Let me just lay out one quote: "That food should be fresh and natural has become an article of faith. It comes as something of a shock to realize that this is a latter-day creed. For our ancestors, natural was something quite nasty. Natural often tasted bad." Her point is that we should demand higher standards from our processed foods, yes, but not abandon them.
  • Example number 8,573,234,948 of why you should never, ever, claim that we have reached the end of innovation. Nature has solutions many of problems with energy and pollution. And we're getting close to being able to mimic those solutions.
  • I appreciate the effort here in providing a guide to identifying bad science. But the points are so generic that you probably have to be a trained scientist to actually apply them. I think I prefer my advice to undergrads on identifying bogus science: if the website you are reading has an ad to lose weight, meet women, or refinance a mortgage, then do not trust anything it says.

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