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Decomposing Comparative Development 1880-2020: A Quantitative Dynamic Analysis

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  • Matteo Cervellati
  • Gerrit Meyerheim
  • Uwe Sunde

Abstract

This paper demonstrates that a tractable heterogeneous agent endogenous growth model can quantitatively match the stylized empirical facts of long-run development trajectories of income, life expectancy, and fertility for 86 countries over the past 140 years. A decomposition of comparative development differences into contributions of country-specific "deep determinants'', accumulation forces during the historical development process, and balanced growth dynamics sheds new light on the mechanisms leading to country-specific differences in development and establishes a link between the largely disparate literatures on endogenous growth, comparative development, and growth accounting. Structural estimation results show that historical accumulation dynamics explain most of today's comparative development patterns. A quantification of the demographic dividend suggests implications for future growth dynamics.

Suggested Citation

  • Matteo Cervellati & Gerrit Meyerheim & Uwe Sunde, 2025. "Decomposing Comparative Development 1880-2020: A Quantitative Dynamic Analysis," CESifo Working Paper Series 12176, CESifo.
    • Handle: RePEc:ces:ceswps:_12176
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    References listed on IDEAS

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    1. Andrés Erosa & Tatyana Koreshkova & Diego Restuccia, 2010. "How Important Is Human Capital? A Quantitative Theory Assessment of World Income Inequality," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 77(4), pages 1421-1449.
    2. Oded Galor, 2011. "Unified Growth Theory and Comparative Development," Rivista di Politica Economica, SIPI Spa, issue 2, pages 9-21, April-Jun.
    3. Matteo Cervellati & Uwe Sunde & Klaus F. Zimmermann, 2017. "Demographic dynamics and long-run development: insights for the secular stagnation debate," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(2), pages 401-432, April.
    4. Oded Galor, 2011. "Unified Growth Theory," Economics Books, Princeton University Press, edition 1, number 9477.
    5. Strulik, Holger & Weisdorf, Jacob, 2014. "How Child Costs And Survival Shaped The Industrial Revolution And The Demographic Transition," Macroeconomic Dynamics, Cambridge University Press, vol. 18(1), pages 114-144, January.
    Full references (including those not matched with items on IDEAS)

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    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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