Interesting blog bits

Some good mid-week reads:

1. Diego Comin, Martí Mestieri on Technology and income dynamics: 1800-2000

   Cross-country inequality is persistent. This column draws on economic history to explain the mechanisms by which dramatic cross-country differences in income emerge. We can reduce inequality through policies that facilitate the penetration of new technologies in poor and middle-income countries. Such policies can go a long way towards reducing existing cross-country income disparities.

2. Carmen M. Reinhart and Kenneth S. Rogoff write a Dear Paul letter.

   Reinhart and Rogoff fire back at Paul Krugman.

3. Daron Acemoglu and James Robinson on The Economic Nature of the Resource Curse: Mechanisms

   We saw in our last post that cross-national evidence suggests countries with poor institutions, such as lack of checks and balances or high levels of corruption, experience economic contractions when they discover natural resources? The question is why.

4. Jeremy Greenwood, Philipp Kircher, Cezar Santos and Michèle Tertilt on An equilibrium model of the African HIV/AIDS epidemic

   How can we accurately model the African HIV/AIDS epidemic? This column presents new research that uses computational general equilibrium models to map the spread of HIV/AIDS. Emphasising the importance of understanding behavioural adjustments and equilibrium effects, this new way of modelling the epidemic may well prove a useful tool for further research.

5. Ben Southwood asks Does speculation really harm the world's poor?

   Development activist Deborah Doane said yesterday on comment is free that Goldman Sachs should admit it drives food prices up through speculation. She excoriates the finance giant for what she sees as its role in 44m across the world being in food poverty, suggesting its charitable efforts amount to little given its speculative activities.

6. Eli Berman, Joe Felter, Jacob N. Shapiro and Erin Troland on Effective aid in conflict zones

   Can foreign aid help countries emerge from civil war? This paper presents new research that suggests that injecting lots of money into conflict zones may in fact encourage corruption and violence. The aid community should focus on what it can do well: working closely with communities to target small-scale, modest improvements that can be implemented in conflict zones. If accompanied by a gradual improvement in the quality of governance, current aid recipients can aspire to a long-run improvement in both security and prosperity.

7. Danielken Molina and Marc Muendler on Preparing to export

   Exporting is essential for economic development. But can firms move from local sales to export sales? How do firms prepare for exporting? This column presents new research showing that worker mobility is an important mechanism by which exporter knowledge spreads through the economy.

8. Gary Becker asks China’s Tilt Toward the Private Sector?

   In a speech this month to Communist party officials (reported in yesterday’s New York Times), Li Keqiang, the recently chosen Prime Minister of China, called for greater reliance on the private sector and reduced dependence on governmental regulations and oversight of the economy. In a remarkable admission he said “The market is the creator of social wealth and the wellspring of self-sustaining economic development.” Several troubling developments in the Chinese economy led to Li’s speech.

9. Richard Posner on The Chinese Economy

   I don’t know what the future holds, but it wouldn’t surprise me if the Chinese rate of economic growth plummeted. There are many negatives in China’s economic picture. The obvious one is the state-owned enterprises, which account for about half of total Chinese output. They are inefficient and corrupt, but also deeply entrenched, with numerous links to the communist officialdom that runs the country.