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Matteo Cervellati Cervellati Teo Home space Research space Teaching space cv space Address
Abstract: This paper investigates the causal effect of life expectancy on economic growth by explicitly accounting for the role of the demographic transition. We present a simple microfounded theory of the economic and demographic transition that predicts that improvements in life expectancy primarily mainly increase population before the demographic transition, but reduce population growth and foster human capital accumulation after the demographic transition. A sufficiently high life expectancy is ultimately the trigger of the transition to sustained income growth. We provide evidence supporting these predictions using data on exogenous mortality reductions in the context of the epidemiological revolution. Keywords: Life Expectancy, Demographic Transition, Epidemiological Revolution, Heterogeneous Treatment Effects. The Economic and Demographic Transition, Mortality, and Comparative Development with Uwe Sunde Abstract: We present a theory of the economic and demographic transition where adult longevity, child mortality, fertility and the education composition of the population are jointly determined. The model allows to investigate the determinants of underdevelopment traps as well as the mechanism that leads to an endogenous exit out of the trap, and to assess the role of exogenous reductions in mortality and the role of permanent differences in extrinsic mortality across countries. The theory delivers a series of novel predictions which are illustrated with a simple dynamic simulation of the model. These predictions are shown to be consistent with evidence using both time series data and cross-country panel data. Keywords: Economic and Demographic Transition, Adult Longevity, Child Mortality, Heterogeneous Human Capital, Comparative Development, Development Traps, Kernel Distributions. Download: (pdf) Previous drafts of the project: IZA DP 2905, 2007 (pdf) , CEPR DP 6384, 2007 (pdf) back to working papers Democratization and the Rule of Law with Piergiuseppe Fortunato and Uwe Sunde Abstract: This paper provides a theory of the interactions between democratization and the emergence of rule of law. Heterogeneous individuals can make costly investments in protection against expropriation by others and the state. The public enforcement of property rights, whose cost depends on these investments, is chosen by the politically enfranchised population. We characterize the dynamic evolution of the economy in which both the political regime and property rights are endogenously determined. There are multiple politico-economic equilibria in terms of public and private property rights protection, which interact with different democratization scenarios whose determinants and consequences are studied. Democratic transitions under conflict may lead to failed democracies with worse property rights protection than oligarchies. Democratic transitions supported by a large consensus, however, serve as coordination device and lead to better protection of property and more stable polities. Keywords: Democratization, Oligarchy, Rule of Law, Democratization Scenario, Multiple Equilibria, Path Dependence Download: (pdf) back to working papers Work Values, Endogenous Sentiments and Redistribution With Joan Esteban and Laurence Kranich Abstract: We examine the interactions between individual behavior, sentiments and the social contract in a model of rational voting over redistribution. Agents have moral “work values”. Individuals’ self-esteem and social consideration of others are endogenously determined comparing behaviors to moral standards. Attitudes toward redistribution depend on self-interest and social preferences. We characterize the politico-economic equilibria in which sentiments, labor supply and redistribution are determined simultaneously. The equilibria feature different degree of “social cohesion ”and redistribution depending on pre-tax income inequality. In clustered equilibria the poor are accounted responsible for their low income since they work less than the moral standard and redistribution is low. Keywords: Social Contract, Endogenous Sentiments, Voting over Taxes, Moral Work Values, Redistribution, Inequality, Politico-Economic Equilibrium. Download: DP, 2009 (pdf) back
to working papers Abstract: This paper investigates the determinants of the political institutions emerging from the process of democratization. We provide a novel theory of endogenous democratization to study how the constitution, both in terms of form of government and electoral rules, depends on the level of inequality at the moment of the democratic transition. The constitutional details, in turn, affect both the level of development and the dynamic evolution of economic inequality. The model delivers a series of theoretical predictions which, jointly with the main assumptions, are tested using the available cross country data. Keywords: Endogenous Democratic Transition, Endogenous Constitutions, Form of State, Electoral Rules, Presidential State, Political Lobbying, Redistribution back to working papers Resistance to Reforms, Inequality and Development With Piergiuseppe Fortunato, 2004 Abstract: We provide a politico economic theory of resistance to reforms and long term development. We consider the endogenous adoption of productive reform opportunities. Innovations allow improving average income but are non neutral with respect to the returns to different production factors; hence inequality in the distribution of endowments induces conflict of interests. We study the emergence and the disappearance of vested interests and resistance to reforms in a subsequent generations framework. The gradual implementation of reforms changes the relative importance as sources of income of the di¤erent factors of production. This implies that households.dynastic attitude towards modernization changes. Economic inequality harms the development process. The dynamic evolution of the system is theoretically characterized. A simple simulation illustrates the ability of the model to study the role of inequality for the endogenous transition to modern growth, the disappearance of vested interests and to explain experiences of overtaking and divergence. Keywords: Reforms, Economic Inequality, Natural Resources, Long Run Growth. back to working papers Human Capital, Life Expectancy and the Process of Development With Uwe Sunde Published in: American Economic Review 95(5), pp. 1653-1672, 2005 Abstract: This paper provides a unified theory of the transition in income, life expectancy, education and population, experienced by the Western world when passing from an environment of economic stagnation to sustained growth. The transition is based on the interplay between human capital formation, technological progress, and life expectancy. A positive feedback between human capital accumulation and longevity is eventually triggered when endogenous skill-biased technological progress provides sufficiently high returns to human capital for large fractions of the population to outweigh the costs in terms of lifetime spent on education. Keywords: long-term development, endogenous life expectancy, heterogeneous human capital, technological progress, industrial revolution. Download: pdf Previous version: IZA DP 585, 2002 (pdf) back to working papers Growth and Endogenous Political Institutions With Piergiuseppe Fortunato and Uwe Sunde Published in: Institutions and Growth (Theo Eicher and Cecilia Garcia-Peñalosa eds.), MIT Press, Cambridge MA, ch. 8, pp. 215-248, 2006 Abstract: In this paper we study the dynamics of political institutions and the different public policies they imply. While political institutions are influenced by economic development, they are in turn a key determinant of the development process. In particular, democratic institutions implement different public policies than oligarchies, and therefore imply different economic outcomes. Economic development in turn increases the likelihood of transitions from oligarchy to democracy because it changes the relative costs for and benefits from the public policies arising under democratic regimes. Democratic regimes tend to provide more efficient public policies, and more redistribution than oligarchic regimes. The results are compared to historical and empirical evidence, and the consequences of the simplifying assumptions are discussed in detail. Keywords: Endogenous Democratic Transition, Political Institutions, Public Goods, Redistribution, Growth. Download: mimeo, 2004 (pdf). back to working papers Hobbes to Rousseau: Inequality, Institutions and Development With Piergiuseppe Fortunato and Uwe Sunde The Economic Journal, 2008 (18), 1354-1384. Abstract: This paper studies the endogenous evolution of economic and political institutions and the interdependencies with the rocess of economic development. Favorable economic institutions in form of a state of law and the absence of societal conflict are not assumed exogenously under certain political systems, but arise in equilibrium. The model delivers several new results. Efficient oligarchies can emerge in equilibrium and persist supported by all groups. Democracies are neither necessary nor sufficient to implement a state of law, even if they may be instrumental. A taxonomy of politico-economic equilibria shows the evolution of institutions depending on economic inequality. We find a non monotonic relationship between inequality and state of law. The model allows to analytically characterize the dynamic emergence of different institutions, highlighting the role of natural resource abundance and inequality for endogenous institutional change and the timing of democratic transitions. The model can generate episodes of reversal of fortunes as result of endogenous institutional change. A simple simulation illustrates the evolution of the economy. Keywords: Inequality, Democratization, Institutions, State of Law, Long-term Development Download: (pdf) Previous Version: IZA DP 1445, 2005 (pdf) back to working papers Are All Democracies Equally Good? The Role of Interactions between Political Environment and Inequality for Rule of Law With Piergiuseppe Fortunato and Uwe Sunde Ecomics Letters 99 (3), 552-556 Abstract: Using cross-country data, we find evidence for a significant negative interaction effect between democracy and inequality in determining the quality of growth-promoting institutions like rule of law. Democracy is associated with institutions of higher quality when inequality is lower. Keywords: inequality, democracy, institutions, rule of law, interactions Download: (pdf) Previous Version: IZA DP 2984, 2007 (pdf) back to working papers Contact: m.cervellati@unibo.it, matteo.cervellati@gmail.com
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