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January 06, 2003

Perhaps the most important question economists have to think about is what causes the tremendous differences around the world in trend economic growth. As Robert Lucas is reported to have said, "Once you start thinking about economic growth, it's hard to think about anything else."

The good news is some real progress is being made. Three recent papers are wonderfully insightful and beautifully simple, simple enough that I intend to teach them in introductory economics. Dani Rodrick, et. al., "Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development," available here, may be the best of the three if you only want to read one. But Daron Acemoglu, et. al., "The Colonial Origins of Comparative Development: An Empirical Investigation," available here and William Easterly and Ross Levine, "Tropics, Germs, and Crops: How Endowments Influence Economic Development" forthcoming in the Journal of Monetary Economics but available for now here, are also terrific.

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