Among the great challenges of development, education continues to take pride of place. In this chapter we highlight some of the channels by which the AIDS pandemic in Africa may affect the continent’s ability to produce education and to use it effectively for growth and poverty reduction. Our assessment is preliminary; we hope here to sketch a larger research agenda rather than to dispose of it...

This article discusses the interaction between economic growth in the sense of human capital accumulation and the dynamics of inequalities. We use a mean-field game framework in which individuals improve their human capital both to improve their wages and to avoid potential competition with less skilled individuals. Our contribution is twofold. First, we exhibit a mechanism in which competition...

The growth of nations is one of the most important topics of our times. Economic growth not only poses an intellectual puzzle that occupies economists’ thinking and politicians’ agendas but also affects the lives of billions of people around the world. In The Mystery of Economic Growth, Elhanan Helpman tells us the tale of economic growth in a vivid and intellectually stimulating way. He organi...

Financial markets crucially rely on the development of an infrastructure dedicated to the enforcement of contracts. Here we study the effects of limited enforcement capacity on financial contracting by proposing a new theory of costly state verification. In our model the principal contracts with a population of entrepreneurs, who borrow to finance risky projects under limited liability. To sust...

The problem of the interrelation of economic growth and economic cycles has recently been at the core of research on macroeconomics. In the last two decades or so, indeed, the integration of growth and business cycle theory has been the Þrst item on the real business cycle (RBC) theorists’ agenda.1 In this framework, the attempt to achieve such an integration turns into the attempt to explain t...

We consider economic growth in the presence of a minimal survival consumption level when preferences are lexicographic giving highest priority to the survival of the current and then all future generations. Knowledge of production is incomplete so future output made possible by current saving must be estimated. The resulting capital accumulation path is compared with the inter–temporally optima...

This paper explores empirically the relation between special-interest groups and economic growth. Our analysis exploits new data on the number of groups observed across countries and time, in order to mitigate the identification problems associated with earlier studies. Also in contrast to earlier work, we examine the impact of groups on two sources of growth—capital accumulation and technologi...

THE “EAST ASIAN MIRACLE”—the several decades of extraordinary economic growth and poverty reduction in a group of East and Southeast Asian countries, beginning around the 1960s—provides the gold standard of development achievement. The miracle also entailed rapid social development, in particular the transformation of demographic regimes from high to low mortality and fertility and a strong exp...

This paper argues that Arthur Lewis originally presented the problem of economic development in terms of an open system, in the sense that it focused on a number of possible pitfalls and socio-economic constraints in the process of capital accumulation and industrialization in a labour-surplus economy. In the hands of the neoclassical economists, who were predominantly interested in achieving d...

This paper presents necessary and sufficient conditions for unambiguous changes in wage inequality in a dual economy, based on analysis of the entire Lorenz curve. These conditions are then used to analyze the distributional consequences of various types of economic growth. In particular, it is shown that capital accumulation or technical progress in agriculture is likely to reduce wage inequal...