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Bureaucratically organized systems tend to be less efficient than economies in which agents are free to choose their output targets, as well as the means to meet them. This paper presents a simple model of planner-manager interactions and shows how bureaucratic economies can end up in a low-effort, low-growth equilibrium even though they may have started in high-effort , high-growth equilibrium. The empirical evidence from eight Central and Eastern European countries during 1948-49 is consistent with our model results, namely, that the growth decline was systemic in nature. The results are applicable to countries in other regions with heavy bureaucratic involvement in the economy.

Macroeconomics --- Taxation --- Inventions --- Bureaucracy --- Administrative Processes in Public Organizations --- Corruption --- One, Two, and Multisector Growth Models --- Socialist Systems and Transitional Economies: Planning, Coordination, and Reform --- Macroeconomics: Consumption --- Saving --- Wealth --- Taxation, Subsidies, and Revenue: General --- Innovation --- Research and Development --- Technological Change --- Intellectual Property Rights: General --- Public finance & taxation --- Inventions & inventors --- Consumption --- Tax incentives --- Technological innovation --- National accounts --- Technology --- Economics --- Technological innovations --- Czech Republic

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This paper formalizes the role of legal infrastructure in economic development in a general equilibrium model with endogenously determined property rights enforcement. It illustrates the mutual importance of property rights protection and market production by the model’s multiplicity of equilibria. In one equilibrium, property rights are enforced and market activity is unhampered. In the other, property rights are not enforced, which discourages economic activity and leaves the economy without the resources and incentives to enforce property rights. Even identically endowed economies may therefore find themselves in very different equilibria.

Macroeconomics --- Public Finance --- Taxation --- Production and Operations Management --- Organizational Behavior --- Transaction Costs --- Property Rights --- One, Two, and Multisector Growth Models --- Taxation, Subsidies, and Revenue: General --- Macroeconomics: Consumption --- Saving --- Wealth --- Innovation --- Research and Development --- Technological Change --- Intellectual Property Rights: General --- Macroeconomics: Production --- Public finance & taxation --- Technology --- general issues --- Tax incentives --- Legal support in revenue administration --- Consumption --- Productivity --- Revenue --- Economics --- Industrial productivity --- General issues

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We propose a simple macroeconomic model with input-output sectoral linkages based on Acemoglu et al. (2016) to quantify how changes in aggregate demand due to additional income from household’s remittances propagates through the network of input-output linkages in Sub-Saharan African countries. We first propose two network centrality measures to assess the role of some sectors as key input providers in the economy. Then, we use these measures to quantify the effect of sectoral linkages on sectoral and total output following an increase in remittances inflows. Our empirical results suggest that the effects of remittances on recipient economies increase with the degree of linkages across sectors, which is especially prominent in the case of the financial intermediation sector. Our paper contributes to the emerging macroeconomic literature on the propagation of shocks across sectors and the implications for the whole economy.

Exports and Imports --- Labor --- Macroeconomics --- Remittances --- Input-Output Models --- One, Two, and Multisector Growth Models --- Network Formation and Analysis: Theory --- Macroeconomics: Production --- Macroeconomics: Consumption --- Saving --- Wealth --- Demand and Supply of Labor: General --- Aggregate Factor Income Distribution --- International economics --- Labour --- income economics --- Production growth --- Consumption --- Labor supply --- Income --- Balance of payments --- Production --- National accounts --- International finance --- Economic theory --- Economics --- Labor market --- Nigeria --- Income economics

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The effects on growth of the integration of an autarkic country into the world economy are analyzed, focusing on the differing roles of imitation and innovation in human capital accumulation. The country initially concentrates on imitation of foreign knowledge; subsequently, as it approaches the knowledge frontier, innovation plays a greater role. Late developers catch up with the rest of the world more rapidly than early developers, reflecting the relatively large imitation opportunity available to them. Restrictions on foreign borrowing reduce the speed of adjustment to the steady state and lower growth and welfare for the country that imposes them.

Exports and Imports --- Investments: Stocks --- Labor --- Macroeconomics --- Economic Integration --- Economic Growth of Open Economies --- One, Two, and Multisector Growth Models --- Human Capital --- Skills --- Occupational Choice --- Labor Productivity --- International Investment --- Long-term Capital Movements --- Macroeconomics: Consumption --- Saving --- Wealth --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Labor Economics: General --- Labour --- income economics --- International economics --- Investment & securities --- Human capital --- Capital controls --- Consumption --- Stocks --- Balance of payments --- National accounts --- Financial institutions --- Capital movements --- Economics --- Labor economics --- United States --- Income economics

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We study models that display growth with financial deepening and increasing inequality along the way to perpetual steady state growth. A benchmark model is essentially a complete markets model but with transaction costs of financial intermediation. New proofs are required and thus provided for stochastic dynamic programming for the case of unbounded return functions and perpetual growth with a non-convex transaction technology. We calibrate the model and report quantitative predictions for Thailand during 1976-96. We find a discrepancy between the model and the data, suspect barriers to financial deepening as a cause, and evaluate the associated welfare loss.

Banks and Banking --- Macroeconomics --- Demography --- Industries: Financial Services --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Financial Institutions and Services: Government Policy and Regulation --- Economic Development: Financial Markets --- Saving and Capital Investment --- Corporate Finance and Governance --- One, Two, and Multisector Growth Models --- Aggregate Factor Income Distribution --- Demographic Economics: General --- Macroeconomics: Consumption --- Saving --- Wealth --- Financial Institutions and Services: General --- Banking --- Population & demography --- Income distribution --- Income inequality --- Population and demographics --- Consumption --- National accounts --- Financial sector --- Economic sectors --- Banks and banking --- Population --- Economics --- Financial services industry --- Thailand