This paper analyses disaggregative growth models which treat development as progress through a space of commodities, from simple to more complex goods.
A quality ladder model is used to test for Marshallian externalities in innovation. The model predicts that, in the absence of spillovers, the geographical distribution of research should be random.
The existing literature now features many examples where log wages are linear in years of schooling and which effectively attempt to correct for least squares bias using instruments based essentially on a single variable. ...