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On the Origin and Causes of Economic Growth

Author

Listed:
  • Ananth Seshadri

    (University of Wisconsin)

  • Nicolas Roys

    (University of Wisconsin - Madison)

Abstract

This paper presents a model of human capital accumulation to better understand the take-off from stagnation to growth from 1500 to 2000 AD. Finitely lived households choose the quantity and quality of children. The key ingredient of the model is a spillover from parents to children in the accumulation of human capital. Depending on the size of the spillover, the model can generate protracted transitions. Starting from an initial level of human capital, the economy can take centuries to reach 95% of the steady state output per capita with a half-life of around 250 years. The model can rationalize the demographic transition as well as the industrial revolution without resorting to exogenous changes in productivity. It is consistent with the changing cross-sectional relationship between income and fertility as well as the decline in the concentration of wealth. Macro evidence on convergence as well as micro evidence on the impact of parental education on children's earnings lend support to our formulation.

Suggested Citation

  • Ananth Seshadri & Nicolas Roys, 2014. "On the Origin and Causes of Economic Growth," 2014 Meeting Papers 310, Society for Economic Dynamics.
    • Handle: RePEc:red:sed014:310
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    Cited by:

    1. Vladimir Bakrac, 2015. "The Importance of Dialogue and Tolerance in a Plural Society," European Journal of Social Sciences Education and Research Articles, Revistia Research and Publishing, vol. 2, ejser_v2_.
    2. Diego Daruich & Julian Kozlowski, 2020. "Explaining Intergenerational Mobility: The Role of Fertility and Family Transfers," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 36, pages 220-245, April.
    3. Julian Kozlowski & Diego Daruich, 2016. "Explaining Income Inequality and Intergenerational Mobility: The Role of Fertility and Family Transfers," 2016 Meeting Papers 665, Society for Economic Dynamics.
    4. Yu Cheng Lin & Sang Do Park, 2023. "Effects of FDI, External Trade, and Human Capital of the ICT Industry on Sustainable Development in Taiwan," Sustainability, MDPI, vol. 15(14), pages 1-24, July.
    5. Lucia Granelli, 2017. "Family Tax Policy with Heterogeneous Altruistic Households," LIDAM Discussion Papers IRES 2017019, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

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