Carl-Johan Dalgaard

• Ph.D.
• Professor (Full) at University of Copenhagen

The present paper examines a neglected determinant of aggregate productivity: temporary cross-border flows of people. We hypothesize that interaction between people from different nations facilitates the international diffusion of ideas, thus stimulating aggregate productivity. In order to assess the causal impact of people flows on productivity, w...

Empirically, a higher frequency of lightning strikes is associated with slower growth in labor productivity across the 48 contiguous US states after 1990; before 1990 there is no correlation between growth and lightning. Other climate variables (e.g., temperature, rainfall and tornadoes) do not conform to this pattern. A viable explanation is that...

The average depreciation rate in the United States has increased since the 1970s, a pattern most likely matched in other advanced economies. We argue that a higher depreciation rate has reduced the risk-free interest rate. We do so in a quantitative overlapping-generations model which allows for risk-premia and market power. We show that the import...

We construct a cohort-based frailty index for 180 countries over the period 1990-2019. We use this measure of physiological aging to estimate the impact of deteriorating health on labor force participation. Our three-dimensional panel framework, in which the unit of observation is a cohort in a given country at a given age, allows us to control for...

We extract data on physiological aging by computing a frailty index for 201 countries over the period 1990–2019. Using panel estimation techniques, we show that the macro frailty index replicates basic regularities previously observed in related studies of aging at the individual level. We then use the frailty index to highlight trends of global ph...

In this paper, we explore the link between public transport infrastructure investments made during antiquity and the presence of infrastructure today; as well as the link between early infrastructure and economic activity, both in the past and in the present. We examine the territory under dominion of the Roman Empire at the zenith of its geographi...

It is a well known fact that economic development and distance to the equator are positively correlated variables in the world today. It is perhaps less well known that as recently as 1500 C.E. it was the other way around. The present paper provides a theory of why the ‘latitude gradient’ changed sign in the course of the last half millennium. In p...

The fetal origins hypothesis suggests that health and nutrition shocks in utero are causally related to health deficits in old age. It has received considerable empirical support, both within epidemiology and economics but so far it has not been integrated into a life cycle theory of human aging and longevity. The present study shows that the healt...

We argue that migration during the last 500 years induced differences in contemporary health outcomes. The theory behind our analysis builds on three physiological facts. First, vitamin D deficiency is directly associated with higher risk of all-cause mortality. Second, the ability of humans to synthesize vitamin D from sunlight (UV-R) declines wit...

We document that a high level of natural productivity of the ocean—a rich bounty of the sea—has had a positive and persistent impact on economic development since pre-industrial times until today. In addition, we document that it is the bounty of the sea of the ancestors of current populations which drives the persistent effect, not geography per s...

How persistent is public goods provision in a comparative perspective? We explore the link between infrastructure investments made during antiquity and the presence of infrastructure today, as well as the link between early infrastructure and economic activity both in the past and in the present, across the entire area under dominion of the Roman E...

This chapter elaborates on the microeconomics of the income–health nexus and incorporates fertility decisions. It examines the trade-off between the number of offspring and the health investments in those offspring, as reflected by body size, thereby providing a new interpretation of the quantity–quality trade-off in a health context. A key insight...

We estimate the average rate of return on investments financed by aid and by domestic resource mobilisation, using aggregate data. Both returns are expected to vary across countries and time. Consequently we develop a correlated random coefficients model to estimate the average returns. Across different estimators and two different data sources for...

We develop a life cycle model featuring an optimal retirement decision in the presence of physiological aging. In modeling the aging process we draw on recent advances within the fields of biology and medicine. In the model individuals decide on optimal consumption during life, the age of retirement, and (via health investments) the timing of their...

We hypothesize that cultural appreciation of hard work and thrift, the Protestant ethic according to Max Weber, had a pre-Reformation origin: the Catholic Order of Cistercians. In support, we document an impact from the Order on growth within the epicenter of the industrial revolution; English counties that were more exposed to Cistercian monasteri...

The latitude gradient in comparative development is a striking fact: as one moves away from the equator, economic activity rises. While this regularity is well known, it is not well understood. Perhaps the strongest correlate with (absolute) latitude is the intensity of ultraviolet radiation (UV-R), which epidemiological research has shown to be a...

Over de sidste 100 år er den danske levestandard blevet forøget markant, overvejende som konsekvens af en evne til at tilegne sig ideer udefra. Det har ikke alene gjort Danmark absolut rigere, men også relativt til de fl este andre lande. Siden 1990’erne er udviklingen imidlertid »slået bak«. Artiklen diskuterer mulige årsager hertil samt potentiel...

We develop a life cycle model featuring an optimal retirement decision in the presence of physiological aging. In modeling the aging process we draw on recent advances within the fields of biology and medicine. In the model individuals decide on optimal consumption during life, the age of retirement, and (via health investments) the timing of their...

We hypothesize that the timing of the fertility transition is an important determinant of comparative physiological development. In support, we provide a model of long-run growth, which elucidates the links between population size, average body size and income during development. Industrialization is shown to be accompanied by a reduction in family...

This paper estimates the total effect of power outages on economic growth in Sub-Saharan Africa over the period 1995-2007. Outages are instrumented using a satellite-based measure of lightning density. As suggested by Henderson et al. (2011), we also combine Penn World Tables GDP data with satellite-based data on nightlights to arrive at a more acc...

This research examines the physical constraints on the growth process. In order to run, maintain and build capital energy is required to be distributed to geographically dispersed sites where investments are deemed profitable. We capture this aspect of physical reality by a network theory of electricity distribution. The model leads to a supply rel...

We test the hypothesis that the Internet is a useful technology for controlling corruption. In order to do so, we develop a novel identification strategy for Internet diffusion. Power disruptions damage digital equipment, which increases the user cost of IT capital, and thus lowers the speed of Internet diffusion. A natural phenomenon causing power...

This research advances the hypothesis that cross-country variation in the historical incidence of eye disease has influenced the current global distribution of per capita income. The theory is that pervasive eye disease diminished the incentive to accumulate skills, thereby delaying the fertility transition and the take-off to sustained economic gr...

Drawing on recent research on allometric scaling and energy consumption, the present paper develops a nutrition-based efficiency wage model from first principles. The biologically micro-founded model allows us to address empirical criticism of the original nutrition-based efficiency wage model. By extending the model with respect to heterogeneity i...

The present study examines whether the Preston curve reflects a causal impact of income on longevity or, for example, factors correlated with both income and life expectancy. In order to understand the Preston curve better, we develop a model of optimal intertemporal consumption in which the representative consumer is subject to physiological aging...

Unified growth theory predicts that the timing of the fertility transition is a key determinant of contemporary comparative development, as it marks the onset of the take-off to sustained growth. Neoclassical growth theory presupposes a take-off, and explains comparative development by variations in (subsequent) investment rates. The present analys...

We advance the hypothesis that cultural values such as high work ethic and thrift, “the Protestant ethic” according to MaxWeber, may have been diffused long before the Reformation, thereby importantly affecting the pre-industrial growth record. The source of pre-Reformation Protestant ethic, according to the proposed theory, was the Catholic Order...

The study estimates an empirical model of return intentions using a dataset compiled from an internet survey of Turkish professionals residing abroad. In the migration literature, wage differentials are often cited as an important factor explaining skilled migration. The findings of our study suggest, however, that non-pecuniary factors, such as th...

Evidence from economics, anthropology and biology testifies to a fundamental trade-off between the number of offspring (quantity) and amount of nutrition per child (quality). This leads to a theory of pre-industrial growth where body size as well as population size is endogenous. But when productive quality investments are undertaken the historical...

We document empirically that rich countries are more politically cohesive than poorer countries. In order to explain this regularity, we provide a model where political cohesion is linked to the emergence of a fully functioning market economy. Without market exchange, the welfare of inherently selfish individuals will be mutually independent. As a...

The present paper shows that the savings motive critically affects the size and sign of scale effects in standard endogenous growth models. If the bequest motive dominates, the scale effect is positive. If the life-cycle motive dominates, the scale effect is ambiguous and may even be negative.

Summary Using a calibrated neoclassical growth model, we address three questions: (i) how much growth should aid flows have produced in Sub-Saharan Africa over the last three decades? (ii) how much aid would be needed to attain the First Millennium Development Goal (MDG#1) of cutting poverty in half by 2015? (iii) taking proposed aid flows as given...

To examine the impact of Internet use on corruption we develop a novel identi…cation strategy for Internet di¤usion. Power disruptions damage digital equipment. This increases the user cost of IT capital, which in turn lowers the speed of Internet di¤usion. A natural phenomenon causing power disruptions is lightning activity. Using global satellite...

The purpose of the present Evaluation Study is to discuss the methodological problems researchers are facing in gauging the impact of aid on economic growth. The discussion is nontechnical and aimed at an audience without much prior knowledge in the fields of macroeconomics and econometrics. The paper provides insights into the following questions:...

This paper provides a framework that decomposes aggregate total factor productivity ("TFP") into a component reflecting relative efficiency across sectors, and another component that reflects the absolute level of efficiency. A development accounting analysis suggests that as much as 85% of the international variation in aggregate "TFP" can be attr...

The development accounting literature almost always assumes a Cobb–Douglas (CD) production function. However, if in reality the elasticity of substitution between capital and labor deviates substantially from 1, the assumption is invalid, potentially casting doubt on the commonly held view that factors of production are relatively unimportant in ac...

The present paper examines the macroeconomic impact of aid, by introducing endogenous aid allocations into a neoclassical growth framework. On this basis it is shown that donor policies can have important implications for the trajectory of recipients’ GDP per capita. Depending on specific donor policy choices, aid disbursements may lead to faster t...

Drawing on recent research on allometric scaling and energy consumption, the present paper develops a nutrition-based efficiency wage model from first principles. The biologically micro-founded model allows us to address empirical criticism of the original nutrition-based efficiency wage model. By extending the model with respect to heterogeneity i...

The natural sciences have established a general scaling law that relates metabolism and body size of animals. Recently this association - known as Kleiber's law - has received deep theoretical foundation by network theory and has been fruitfully applied to explain various biological phenomena, in particular ontogenetic growth. Here we derive a simi...

This paper offers micro-foundations for the dynamic relationship between technology and population in the pre-industrial world, accounting for both technological progress and the hitherto neglected but common phenomenon of technological regress. A positive feedback between population and the adoption of new techniques that increase the division of...

The present paper documents that political stability is positively associated with the extent of domestic trade. In explaining this reg- ularity, we provide a model where political cohesion is linked to the emergence of a fully functioning market economy. Without market ex- change, the welfare of inherently selfish individuals will be mutually inde...

The development accounting literature almost always assumes a Cobb-Douglas (CD) production function. However, if in reality the elasticity of substitution between capital and labor deviates substantially from 1, the assumption is invalid, potentially casting doubt on the commonly held view that factors of production are relatively unimportant in ac...

We hypothesize that the spread of the Internet has reduced corruption, chiefly through two mechanisms. First, the Internet facilitates the dissemination of information about corrupt behavior, which raises the detection risks to shady bureaucrats and politicians. Second, the Internet has reduced the interface between bureaucrats and the public. Usin...

This paper develops a bioeconomic Malthusian growth model. By integrating recent research on allometric scaling, energy consumption and ontogenetic growth, we provide a model where subsistence consumption is endogenously linked to body size and fertility. The theory admits a unique Malthusian equilibrium in a two-dimensional state space characteriz...

The present paper hypothesizes that the emergence of a relatively cooperative political process, observed in modern day affluent societies, is inescapably linked to the emergence of a fully functioning market economy. In the absence of markets where goods are exchanged the welfare of inherently selfish individuals will be mutually independent. As a...

Over the past decade, an enormous body of literature has developed investigating the notion of skill biased technological change (SBTC). A major stumbling block for theories that rely on accelerating technological change is the contrary and equally well documented observation that ma-jor developed economies in the world experienced a "productivity...

The First Millennium Development Goal (MDG#1) is to cut the fraction of global population living on less than one dollar per day in half, by 2015. Foreign aid financed investments may contribute to the attainment of this goal. But how much can aid be reasonably expected to accomplish? A widespread calibration approach to answering this question is...

The present paper provides a new theory of capital accumulation and growth. While the law of motion for capital per worker is structurally identical to that of the neoclassical growth model (Solow, 1956), the underlying foundation is very different. In contrast to the Solow model, the purposed theory is based on thermodynamical principles and assoc...

This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection a...

Corruption in the public sector erodes tax compliance and leads to higher tax evasion. Moreover, corrupt public officials abuse their public power to extort bribes from the private agents. In both types of interaction with the public sector, the private agents are bound to face uncertainty with respect to their disposable incomes. To analyse effect...

The study estimates an empirical model of return intentions using a dataset compiled from an internet survey of Turkish professionals residing abroad. In the migration literature, wage differentials are often cited as an important factor explaining skilled migration. The findings of our study suggest, however, that non-pecuniary factors, such as th...

This paper shows that a significant part of measured total factor productivity (TFP) differences across countries is attributable not to technological factors that affect the entire economy neutrally, but rather, to variations in the structural composition of economies. In particular, the allocation of scarce inputs between agriculture and non- agr...

There appears to be ample evidence that the size of population or stock of human capital acted as a stimulus to growth in historical times. In the post WWII era, however, there is little evidence of such scale effects on growth. If we accept the historical evidence, we are left with an important question: Where did the scale effect go? This paper p...

Club convergence may arise as an empirical prediction from standard neoclassical growth models where the aggregate production technology displays diminishing returns to capital. This requires that the propensity to save from wage income is greater than the propensity to save from capital income. This paper shows how endogenous capital utilization m...

This paper investigates the marginal productivity of investment in the world’s poorest economies. The aim is to estimate the return on investments financed by foreign aid as well as by domestic resource mobilization, using crosscountry aggregate data. In practice the return on both investment categories can be expected to vary considerably across c...

This paper tackles a number of issues that are central to cross-country comparisons of productivity. We develop a “dual” method to compare levels of total factor productivity (TFP) across nations that relies on factor price data rather than the data on stocks of factors required by standard “primal” estimates. Consistent with the development accoun...

The present paper re-examines the effectiveness of foreign aid theoretically and empirically. Using a standard OLG model we show that aid inflows will in general affect long-run productivity. The size and direction of the impact may depend on policies, 'deep' structural characteristics and the size of the inflow. The empirical analysis investigates...

This paper argues that a significant part of measured TFP differences across countries is attributable not to technological factors that affect the entire economy neutrally, but rather, to variations in the structural composition of economies. In particular, the allocation of scarce inputs between agriculture and non-agriculture seems to be important...

According to much of the recent growth literature, the dramatic worldwide decline in fertility currently taking place should ultimately lead to global economic stagnation. This pessimistic prediction is not shared by the original innovation-based growth literature. In recent years, however, this strand of the literature has been criticized for rest...

This paper examines the joint determination of long-run income per worker and capital utilization. Comparatively low (optimal) rates of capital utilization may arise in poor economies in response to weak underlying structural characteristics. The quantitative implications of variable capital utilization are also explored. It is demonstrated that ad...

This paper studies the theoretical and empirical implications of monetary policy making by committee under four different voting protocols. The protocols are a consensus model, where a supermajority is required for a policy change; an agenda-setting model, where the chairman controls the agenda; a dictator model, where the chairman has absolute pow...

In this paper we develop a model of invention and knowledge-diffusion. We show, in a setting of imperfect knowledge-transfers from one generation to the next, that there is a tension between the tendency for old knowledge to be lost on the one hand, and the tendency for preserved knowledge to be relearned and new ideas to be created on the other. T...

This study provides a critical analysis of the growth regressions in Burnside and Dollar [2000]. First, we analyse the relationship between aid and government expenditure in a modified neo-classical growth model. One of the main results of the analysis is that while good policies spur growths they may at the same time reduce the effectiveness of fo...

We demonstrate that two popular measures of inequality related to the discussion of σ-convergence lead to different conclusions when used on data from Penn World Table. The reason is that the measures assign different weights to individual countries’ growth performance.

Fertility has been declining on all continents for the last couple of decades and this development is expected to continue in the future. Prevailing innovation-based growth theories imply, as a consequence of scale effects from the size of population, that such demographic changes will lead to a major slowdown in productivity growth. In this paper...

In this paper we develop a theory of scale-invariant endogenous growth. By this we mean a theory capable of generating a balanced growth path where both the growth rate and the level of GDP per capita are independent of the size of population, where population growth is neither necessary nor conductive for economic growth, and where economic incent...

Are there economic forces that narrow the gap between rich and poor countries New research tries to shed light on this old question. Although there are by now some well-established facts there are also a lot of controversial findings and unsettled issues. Therefore, this research is often labeled the convergence debate. This paper presents a select...

The present paper re-examines the effectiveness of foreign aid theoretically and empirically. Using a standard OLG model we show that aid inflows will in general affect long-run pro- ductivity. The size and direction of the impact may depend on policies, 'deep' structural characteristics and the size of the inflow. The empirical analysis investigat...

This study introduces physiological aging into a simple model of optimal in- tertemporal consumption. In this endeavor we draw on the natural science literature on aging. According to the purposed theory, the speed of the aging process and the time of death are endogenously determined by optimal health investments. At the same time, physiological a...

The present paper provides a new theory of capital accumulation and growth. The law of motion for capital per worker is structurally iden- tical to that of the neoclassical growth model (Solow, 1956). In contrast to the Solow model, however, the purposed theory neither requires the existence of an aggregate (Cobb- Douglas) production function, nor...

The present paper examines the macroeconomic impact of aid, by introducing endogenous aid allocations into a neoclassical growth frame-work. On this basis it is shown that donor policies can have important implications for the trajectory of recipients' GDP per capita. Depend-ing on specific donor policy choices, aid disbursements may lead to faster...