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diffusion the growth economics blog skip to primary content skip to secondary content the growth economics blog this blog takes robert solow seriously search main menu home about me class material data figures maps papers tag archives diffusion persistence in economic development posted on may 12 2014 by dvollrath 2 note the growth economics blog has moved sites click here to find this post at the new site last weekend i attended a conference at brown university on deep rooted factors in economic development the key theme that came out of that weekend was persistence nearly all of the papers gave evidence that economic shocks or initial differences in economic outcomes dissipate very very slowly if at all oded galor and omer ozak presented a paper on the origin of time preferences e g patience they find surprisingly strong empirical evidence linking inherent agricultural yields to survey responses regarding patience with the argument being that places with high returns to settled agriculture which requires patience selected for higher patience populations over time stelios michalopoulos louis putterman and david weil presented evidence that african individuals descended from agriculturalist societies are more economically successful than those descended from pastoralists even if we compare people who no longer reside in their traditional homelands both papers show the very long reach of history on current economic outcomes related to this were a number of papers that looked at how economies responded to shocks eric chaney and richard hornbeck showed that following the explusion of the moriscos from spain in 1609 the population and income per capita in the heavily affected regions did not adjust immediately i e in a decade but over a much longer time frame i e a century felipe valencia caicedo provided evidence on the persistent effect of jesuit missions in south america on human capital formation enrico spolaore and romain wacziarg looked empirically at how long it took the idea of low fertility to spread from france across europe melissa dell presented work on how areas subject to insurgency during the mexican revolution early 20th century are still economically less developed than other areas of mexico the fact that very early agricultural conditions are still influential in comparative development or that economic shocks linger for centuries is very hard to reconcile with how we typically think about economic growth even if one country area starts with bad conditions or is subject to a bad shock all of our intuition is that they should eventually be able to catch back up physical and human capital can be accumulated through savings or education and this accumulation should actually speed up the farther away from its potential that a country finds itself technological changes are as we like to say non rival and non excludable so that countries can copy innovations relatively easily while there is certainly a lag involved in either saving up new capital or adopting new technologies we re talking about lags measured in years not centuries for technology or productivity in general it seems especially hard to understand long run persistence why is it that poor places or people do not just adopt the higher productivity techniques ideas processes that they see around them my reaction to the papers i saw at brown was that we are probably too cavalier in assuming that these ideas can be costlessly copied we are probably better off thinking of ideas as embodied in people like cultural traits ricardo hausman just had an interesting post on this he thinks knowledge is generally tacit not explicit therefore it takes some kind of costly person to person transmission to move good ideas or techniques across populations with costly transmission persistence makes more sense we re seeing the outcome of a slow diffusion of new ideas on patience fertility the value of education or agricultural techniques through populations that slow diffusion comes about because these ideas are transmitted as tacit knowledge from parents to children masters to apprentices teachers to students or old employees to new employees if a bad shock wipes out tacit knowledge say by expelling experienced workers or changing the climate then it isn t necessarily true that an economy would eventually return back to its pre shock equilibrium once the tacit knowledge is gone its gone this is all telling me that i need to think harder about diffusion processes is there some kind of transmission of traits conducive to growth going on either genetically like in galor and moav 2002 or culturally like in doepke and zilibotti 2008 are language differences and or genetic differences the key to measuring the frictions in the diffusion process like in spolaore and wacziarg 2009 the reading list just keeps growing share this share on x opens in new window x share on facebook opens in new window facebook share on reddit opens in new window reddit email a link to a friend opens in new window email like loading posted in uncategorized tagged development diffusion persistence technology 2 replies recent posts moving day the declining marginal product of capital do you need more money for economic growth to occur calculating growth rates iq and economic growth shameless plug click on the picture to find it on amazon follow blog via email enter your email address to follow this blog and receive notifications of new posts by email email address follow archives january 2016 december 2015 november 2015 october 2015 september 2015 august 2015 july 2015 june 2015 may 2015 april 2015 march 2015 february 2015 january 2015 december 2014 november 2014 october 2014 september 2014 august 2014 july 2014 june 2014 may 2014 april 2014 march 2014 tags accounting agriculture allocation bgp book capital collapse competition consumption convergence culture development diffusion doomed dual dynamism education empirics employment entry environment 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