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A Review of Disease and Development

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  • Ruiwu Liu

Abstract

Acemoglu and Johnson (2007) put forward the unprecedented view that health improvement has no significant effect on income growth. To arrive at this conclusion, they constructed predicted mortality as an instrumental variable based on the WHO international disease interventions to analyse this problem. I replicate the process of their research and eliminate some biases in their estimate. In addition, and more importantly, we argue that the construction of their instrumental variable contains a violation of the exclusion restriction of their instrumental variable. This negative correlation between health improvement and income growth still lacks an accurate causal explanation, according to which the instrumental variable they constructed increases reverse causality bias instead of eliminating it.

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  • Ruiwu Liu, 2021. "A Review of Disease and Development," Papers 2104.13475, arXiv.org.
    • Handle: RePEc:arx:papers:2104.13475
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    References listed on IDEAS

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    1. Daron Acemoglu & Simon Johnson, 2007. "Disease and Development: The Effect of Life Expectancy on Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 115(6), pages 925-985, December.
    2. Daron Acemoglu & Simon Johnson, 2014. "Disease and Development: A Reply to Bloom, Canning, and Fink," Journal of Political Economy, University of Chicago Press, vol. 122(6), pages 1367-1375.
    3. David E. Bloom & David Canning & Günther Fink, 2014. "Disease and Development Revisited," Journal of Political Economy, University of Chicago Press, vol. 122(6), pages 1355-1366.
    4. Klepper, Steven & Simons, Kenneth L, 1997. "Technological Extinctions of Industrial Firms: An Inquiry into Their Nature and Causes," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 6(2), pages 379-460, March.
    5. Barzel, Yoram, 1969. "Productivity and the Price of Medical Services," Journal of Political Economy, University of Chicago Press, vol. 77(6), pages 1014-1027, Nov./Dec..
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