Steven N. Durlauf

• Professor at University of Chicago

This article proposes a fully nonparametric model to investigate the dynamics of intergenerational income mobility for discrete outcomes. In our model, an individual’s income class probabilities depend on parental income in a manner that accommodates nonlinearities and interactions among various individual and parental characteristics, including ra...

This essay reviews two recent books on economic growth: Mark Koyama and Jared Rubin’s How the World Became Rich and J. Bradford DeLong’s Slouching Towards Utopia. Both books offer rich and nuanced treatments of the long-run and proximate mechanisms underlying the global growth in the past centuries. I evaluate their arguments and conclude with some...

This paper proposes some new measures of intergenerational persistence based on the idea of characterizing the memory of origin in the stochastic process that links the socioeconomic classes of parents and children. We introduce “memory curves” for all future generations given any initial condition of class for a family dynasty, which reveal how in...

Immigrants in economies with a dominant native language exhibit substantial heterogeneities in language acquisition of the majority language. We model partial language acquisition as an equilibrium phenomenon. We consider an environment where heterogeneous agents from various minority groups choose whether to acquire a majority language fully, part...

Any empirical claim about the role of genes in socioeconomic outcomes involves successfully addressing the identification problem. This commentary argues that socioeconomic outcomes such as education are sufficiently complex, involving so many mechanisms, that understanding the role genes requires the use of formal theoretical structures.

This paper provides a synthesis of theoretical and empirical work on the Great Gatsby Curve, the positive empirical relationship between cross-sectional income inequality, and persistence of income across generations. We present statistical models of income dynamics that mechanically give rise to the relationship between inequality and mobility. Fi...

This paper provides a synthesis of theoretical and empirical work on the Great Gatsby Curve, the positive empirical relationship between cross-section income inequality and persistence of income across generations. We present statistical models of income dynamics that mechanically give rise to the relationship between inequality and mobility. Five...

Poverty trap models are dynamical systems with more than one attractor. Similar dynamical systems arise in optimal growth and macroeconomic models. These systems are often studied empirically by ad hoc methods relying on intuition from deterministic systems, such as looking for multiple peaks in the stationary distribution of states. We develop Mar...

The Great Gatsby Curve, the observation that for OECD countries greater cross-sectional income inequality is associated with lower mobility, has become a prominent part of scholarly and policy discussions because of its implications for the relationship between inequality of outcomes and inequality of opportunities. We explore this relationship by...

One of the most widely studied empirical questions in the new growth economics concerns the role of initial conditions in affecting long-run outcomes. The statistical formulation of this dependence is known as convergence. This article surveys empirical work on convergence, with emphasis on the relationships between conventional definitions of conv...

In this article, we explore nonlinearities in the intergenerational mobility process using threshold regression models. We uncover evidence of threshold effects in children's outcomes based on parental education and cognitive and noncognitive skills as well as their interaction with offspring characteristics. We interpret these thresholds as organi...

In this paper, we explore the role of model uncertainty in explaining the different findings in the literature regarding the effect of shall-issue right-to-carry concealed weapons laws on crime. In particular, we systematically examine how different modeling assumptions affect the results. We find little support for some widely used assumptions in...

This paper provides an overview of different approaches to policy evaluation. We focus on how different types of uncertainty should be accounted for in the policy evaluation process. Appropriate incorporation of uncertainty in policy evaluation leads to what we call sturdy decisions. We describe classical Bayesian decision theory and decision theor...

This essay describes basic facts about intergenerational mobility as well as some of the mechanisms that have been proposed to explain levels of mobility or persistence of socioeconomic status across generations. Limits of current research are identified.

This paper provides a systematic analysis of identification in linear social interactions models. This is a theoretical and econometric exercise as the analysis is linked to a rigorously delineated model of interdependent decisions. We develop an incomplete information game for individual choice under social influences that nests standard models as...

This commentary argues that Bentley et al.’s mapping of shifts in collective human behavior provides a novel vision of how social science theory can inform large data set analysis.Related ArticlesMapping collective behavior in the big-data eraR. Alexander BentleyBehavioral and Brain Sciences3716310.1017/S0140525X13000289 How to Cite This Article L...

The recent growth literature has seen an explosion of work exploring the role of new and fundamental theories of growth such as geography, institutions, ethnic fractionalization, and religion. Nevertheless, claims about the empirical validity of these new growth theories are typically made within very particular specifications of the growth model....

This chapter is designed to outline how current methods in formal policy analysis have evolved to better respect limits to an analyst's knowledge. These limits are referred to as model uncertainty both in order to capture the idea that formal policy analysis is predicated on mathematically precise formulations that embody assumptions on the part of...

We develop a general framework that extends choice models by including an explicit representation of the process and context of decision making. Process refers to the steps involved in decision making. Context refers to factors affecting the process, focusing in this paper on social networks. The extended choice framework includes more behavioral r...

This paper examines how estimates of the deterrent effect of capital punishment depend on alternate choices of assumptions concerning the homicide process. Specific models of the homicide process represent bundles of these assumptions, which involve the unobserved heterogeneity, the relevant penalty probabilities for homicide choices, possible cros...

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This paper contributes to a growing literature that attempts to determine whether disparities in police stops and searches of potential criminals of different races stem from taste-based discrimination. The key challenge in making this evaluation is that police officers have more information than the econometrician and thus racial disparities in po...

Objectives Investigate how different model assumptions have driven the conflicting findings in the literature on the deterrence effect of capital punishment. Methods The deterrence effect of capital punishment is estimated across different models that reflect the following sources of model uncertainty: (1) the uncertainty about the probability mode...

Objectives Evaluate the use of various time series methods to measure the deterrence effect of capital punishment. Methods The analysis of the time series approach to deterrence is conducted at two levels. First, the mathematical foundations of time series methods are described and the link between the time series properties of aggregate homicide...

This article considers the implications of complex systems models for the study of economics and the evaluation of public policies. I argue that complexity can enhance current approaches to formal economic analysis, but does so in ways that complement current approaches. I further argue that while complexity can influence how public policy analysis...

Much popular belief--and public policy--rests on the idea that those born into poverty have it in their power to escape. But the persistence of poverty and ever-growing economic inequality around the world have led many economists to seriously question the model of individual economic self-determination when it comes to the poor. In Poverty Traps,...

This paper provides a general description of the relationship between individual decision problems and aggregate crime regressions. The analysis is designed to elucidate the behavioral and statistical assumptions that are implicit in the use of aggregate crime regressions for both the analysis of crime determinants as well in counterfactual policy...

While interest in social determinants of individual behavior has led to a rich theoretical literature and many efforts to measure these influences, a mature "social econometrics" has yet to emerge. This chapter provides a critical overview of the identification of social interactions. We consider linear and discrete choice models as well as social...

The study of social interactions has enriched both the domain of inquiry of economists and the way economists conceptualize individual decision making. The review aims to introduce the classes of models that accommodate estimation of social interactions and to examine the key areas where significant advances have been made in the identification of...

This paper considers the observational implications of social influences on adoption decisions for an environment of perfect foresight adopters. We argue that social influences can produce two observable effects: (1) discontinuities in unconditional adoption curves and (2) pattern reversals in conditional adoption curves, in which earlier adoption...

This paper provides some reflections on the new macroeconomics of model uncertainty. Model uncertainty is argued to have important positive and normative implications for macroeconomic analysis. We provide a general discussion of the relationship between macroeconomic models that assume a specific model and those that do not and provide some exampl...

In a social network, agents have their own reference group which may influence their behaviour. In turn, the agents' attributes and their behaviour affect the formation and the structure of the social network. This paper surveys the econometric literature on both aspects of social networks, and discusses the identification and estimation issues the...

The evolution of economic growth theory throughout the post-war period has been deeply influenced by the effort to explain broad patterns in cross-country behaviour. In this entry, we discuss some of the salient empirical regularities associated with neoclassical and new growth economics and consider the shift in focus that has occurred. We first d...

The general question of convergence, understood as the tendency of differences between countries to disappear over time, is of long-standing interest to social scientists. In the 1950s and early 1960s, many analysts discussed whether capitalist and socialist economies would converge over time, in the sense that market institutions would begin to sh...

This paper discusses the history of the use of cross-country regressions in modern growth economics. These regressions continue to be the workhorse of empirical growth analysis even though their meaning continues to be controversial. I argue that the early interpretations of these regressions have proven to be inappropriate and led to substantial e...

Although Tobin 1955 was one of the founding papers of the neoclassical one-sector growth model with smooth substitution between capital and labor, James Tobin's contributions to long-run growth theory throughout his career stood apart from other neoclassical growth models because of his emphasis on portfolio substitution between money and capital a...

This paper examines Lionel Robbins' critical attitude towards formal empirical work from the standpoint of modern econometrics. It argues that his attitude towards empirical work rested on indefensible assumptions and that he failed to realise that the role he saw for empirical work undermined his belief in the primacy of economic theory. This matt...

The presence or absence of convergence between rich and poor countries represents one of the most important questions in the new growth economics. New growth theories have been explicitly designed to explain forms of divergence which do not appear in their neoclassical counterparts. Despite substantial empirical work on convergence, there is no con...

This chapter provides an overview of current practices in the econometric analysis of economic growth. We describe some of the main methodologies that have been developed to study growth as well as some of the major empirical findings with which they are associated. Further, we explore the relationship between econometric analyses and growth theori...

This article provides a framework for comparing meritocratic and affirmative action admissions policies. The context of the analysis is admissions to public universities; admission rules are evaluated as part of the public investment problem faced by a state government. Meritocratic and affirmative admissions policies are compared in terms of their...

"This article considers the relationship between the use of regressions and the use of variance contrast methods to uncover social interactions. We illustrate how these methods employ different identifying assumptions and are therefore complementary approaches. We also provide formal identification results that extend existing ones for the two meth...

This article investigates the strength of empirical evidence for various growth theories when there is model uncertainty with respect to the correct growth model. Using model averaging methods, we find little evidence that so-called fundamental growth theories play an important role in explaining aggregate growth. In contrast, we find strong eviden...

In this paper, we describe a set of trade-offs that policymakers face with respect to fluctua? tions at different frequencies. A complete treat? ment is given in Brock, Durlauf, and Rondina (2008). The presence of frequency-specific effects of policy choices has generally not been a focus of macroeconomic policy analysis, important exceptions inclu...

The purpose of this study was to estimate the deterrent effect of capital punishment by employing a methodology that accounted for model uncertainty by integrating various studies into a single coherent analysis. First, this study replicated the results from two previous studies, Dezhbakhsh, Rubin and Shepherd (2003) and Donohue and Wolfers (2005),...

The purpose of this study was to estimate the deterrent effect of capital punishment by employing a methodology that accounted for model uncertainty by integrating various studies into a single coherent analysis. First, this study replicated the results from two previous studies, Dezhbakhsh, Rubin and Shepherd (2003) and Donohue and Wolfers (2005),...

Path dependence refers to the idea that ‘history matters’, that is, that various types of contingent events may have long-term consequences. This article provides some formalization of the concept and assesses its usefulness in elucidating economic phenomena.

The many contemporary characterizations of stigma share the assumption that individuals have characteristics that devalue them in the eyes of others. The observer’s response leads to status loss and discrimination. Stigmatized attributes, their linkage to a particular set of stereotypes and the general response to those stereotypes are shared withi...

The IS–LM model is a short-run macroeconomic analytical construct for studying an economy with idle productive resources. The diagram has been especially influential because its constituent curves are loci on which the goods market (IS curve) and the money market (LM curve) are respectively in equilibrium, making it possible to infer changes in fis...

Statistical mechanics models constitute a mathematical framework that is useful in describing the aggregate behaviour of interacting populations. While the methods originate in physics, they have proven useful in modelling socio-economic phenomena. This article describes the basic properties of statistical mechanics models and discusses their use i...

The evolution of economic growth theory throughout the post-war period has been deeply influenced by the effort to explain broad patterns in cross-country behaviour. We discuss some of the salient empirical regularities associated with neoclassical and new growth economics and consider the shift in focus that has occurred. We first describe the sty...

We introduce a new hybrid approach to joint estimation of Value at Risk (VaR) and Expected Shortfall (ES) for high quantiles of return distributions. We investigate the relative performance of VaR and ES models using daily returns for sixteen stock market indices (eight from developed and eight from emerging markets) prior to and during the 2008 fi...

This paper provides a set of results on the econometric identifiability of binary choice models with social interactions. Our analysis moves beyond parametric identification results that have been obtained in the literature to consider the identifiability of model parameters when the distribution of random payoff terms is unknown. Further, we consi...

This paper compares the performance of different policy rules. Our comparisons focus on simple feedback rules versus rules which are optimal, given knowledge of the correct economic structure and the appropriate loss function for the policymaker. First, we compare rule performance when the correct model is not known. Second, we compare rule perform...

Costas Azariadis was born in Athens, Greece, in 1943. He attended the National Technical University in Athens and received a degree in chemical engineering in 1969. He then attended Carnegie Mellon University, receiving an MBA in 1971 and his Ph.D. in 1975. His doctoral dissertation was advised by Edward Prescott and Robert Lucas. Azariadis s first...

This paper explores ways to integrate model uncertainty into policy evaluation. We describe a general framework that includes both model averaging methods as well as some measures that describe whether policies and their consequences are model dependent. These general ideas are then applied to assess simple monetary policy rules for some standard N...

This paper compares the performance of different policy rules. Our comparisons focus on simple feedback rules versus rules which are optimal, given knowledge of the correct economic structure and the appropriate loss function for the policymaker. First, we compare rule performance when the correct model is not known. Second, we compare rule perform...

The reintroduction of capital punishment in 1976 that ended the four-year moratorium on executions generated by the Supreme Court in the 1972 decision Furman v. Georgia has permitted researchers to employ state-level heterogeneity in the use of capital punishment to study deterrent effects. However, no scholarly consensus exists as to their magnitu...

In this article I consider the evaluation of racial profiling in traffic stops from a combination of welfarist and non-welfarist considerations. I argue that benefits from profiling in terms of crime reduction have not been identified and that further, the harm to those who are innocent and stopped is potentially high. I then argue that profiling c...

Political economy… finds the laws underlying a mass of contingent occurrences. It is an interesting spectacle to observe here how all of the interconnections have repercussions on others, how the particular spheres fall into groups, influence others, and are helped or hindered by these. This interaction, which at first sight seems incredible since...