Learning the Wealth of Nations
We study the evolution of market-oriented policies over time and across countries. We consider a model in which own and neighbors' past experiences influence policy choices, through their effect on policymakers' beliefs. We estimate the model using a large panel of countries. We find that there is a strong geographical component to learning, which is crucial to explain the slow adoption of liberal policies during the postwar period. Our model also predicts that there would be a substantial reversal to state intervention if nowadays the world was hit by a shock of the size of the Great Depression.
We would like to thank Daron Acemoglu, Graziella Bertocchi, V.V. Chari, Chad Jones, Ramon Marimon, Joel Mokyr, Juan Pablo Nicolini, Monika Piazzesi, Martin Schneider, Ruben Segura, Tao Zha and participants in many seminars and conferences. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
Francisco J. Buera & Alexander Monge‐Naranjo & Giorgio E. Primiceri, 2011. "Learning the Wealth of Nations," Econometrica, Econometric Society, vol. 79(1), pages 1-45, 01. citation courtesy of