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Working Paper
On the Transition to Sustained Growth: The Importance of Recent Agricultural Employment
We study a model where a single good can be produced using a diminishing-returns technology (Malthus) and a constant-returns technology (Solow). We map the former to agriculture and show that the share of agricultural employment declines at a constant rate during the economic transition and that recent observations on the share are sufficient to estimate the onset of transition. Our model implies that (i) output growth is higher and increasing after the onset of transition, (ii) during the transition, it is a first-order autoregressive process, and (iii) the rate of decline in the share of ...
Working Paper
On the Transition to Sustained Growth: The Importance of Recent Agricultural Employment
We study a model where a single good can be produced using a diminishing-returns technology (Malthus) and a constant-returns technology (Solow). We map the former to agriculture and show that the share of agricultural employment declines at a constant rate during the economic transition and that recent observations on the share are sufficient to estimate the onset of transition. Our model implies that (i) output growth is higher and increasing after the onset of transition, (ii) during the transition, it is a first-order autoregressive process, and (iii) the rate of decline in the share of ...
Working Paper
The U.S. oil supply revolution and the global economy
This paper investigates the global macroeconomic consequences of falling oil prices due to the oil revolution in the United States, using a Global VAR model estimated for 38 countries/regions over the period 1979Q2 to 2011Q2. Set-identification of the U.S. oil supply shock is achieved through imposing dynamic sign restrictions on the impulse responses of the model. The results show that there are considerable heterogeneities in the responses of different countries to a U.S. supply-driven oil price shock, with real GDP increasing in both advanced and emerging market oil-importing economies, ...
Working Paper
On the Transition to Sustained Growth: The Importance of Recent Agricultural Employment
We study a model where a single good can be produced using a diminishing-returns technology (Malthus) and a constant-returns technology (Solow). We map the former to agriculture and show that the share of agricultural employment declines at a constant rate during the economic transition and that recent observations on the share are sufficient to estimate the onset of transition. Our model implies that (i) output growth is higher and increasing after the onset of transition, (ii) during the transition, it is a first-order autoregressive process, and (iii) the rate of decline in the share of ...
Working Paper
Nonlinear Pricing in Village Economies
This paper examines the price of basic staples in rural Mexico. We document that nonlinear pricing in the form of quantity discounts is common, that quantity discounts are sizable for typical staples, and that the well-known conditional cash transfer program Progresa has significantly increased quantity discounts, although the program, as documented in previous studies, has not affected on average unit prices. To account for these patterns, we propose a model of price discrimination that nests those of Maskin and Riley (1984) and Jullien (2000), in which consumers differ in their tastes and, ...
Working Paper
On the Transition to Sustained Growth: The Importance of Recent Agricultural Employment
We study a model where a single good can be produced using a diminishing-returns technology (Malthus) and a constant-returns technology (Solow). We map the former to agriculture and show that the share of agricultural employment declines at a constant rate during the economic transition and that recent observations on the share are sufficient to estimate the onset of transition. Our model implies that (i) output growth is higher and increasing after the onset of transition, (ii) during the transition, it is a first-order autoregressive process, and (iii) the rate of decline in the share of ...
Working Paper
Growth at Risk From Climate Change
How will climate change affect risks to economic activity? Research on climate impacts has tended to focus on effects on the average level of economic growth. I examine whether climate change may make severe contractions in economic activity more likely using quantile regressions linking growth to temperature. The effects of temperature on downside risks to economic growth are large and robust across specifications. These results suggest the growth at risk from climate change is large—climate change may make economic contractions more likely and severe and thereby significantly ...
Working Paper
Do Sovereign Wealth Funds Dampen the Negative Effects of Commodity Price Volatility?
This paper studies the impact of commodity terms of trade (CToT) volatility on economic growth (and its sources) in a sample of 69 commodity-dependent countries, and assesses the role of Sovereign Wealth Funds (SWFs) and quality of institutions in their long-term growth performance. Using annual data over the period 1981-2014, we employ the Cross-Sectionally augmented Autoregressive Distributive Lag (CS-ARDL) methodology for estimation to account for cross-country heterogeneity, cross-sectional dependence, and feedback effects. We find that while CToT volatility exerts a negative impact on ...
Working Paper
Industrialization and the demand for mineral commodities
This paper uses a new data set extending back to 1840 to investigate how industrialization affects the derived demand for mineral commodities. I establish that there is substantial heterogeneity in the long-run effect of manufacturing output on demand across five commodities after controlling for sectoral change, substitution and technological development. My results imply substantial differences across commodities with regard to future demand from industrializing countries and with regard to the effect of demand shocks on prices. Models should include non-Gormand preferences to account for ...
Working Paper
Fair weather or foul? the macroeconomic effects of El Niño
This paper employs a dynamic multi-country framework to analyze the international macroeconomic transmission of El Nio weather shocks. This framework comprises 21 country/region-specific models, estimated over the period 1979Q2 to 2013Q1, and accounts for not only direct exposures of countries to El Nio shocks but also indirect effects through third-markets. We contribute to the climate-macroeconomy literature by exploiting exogenous variation in El Nio weather events over time, and their impact on different regions cross-sectionally, to causatively identify the effects of El Nio shocks on ...