Decomposing Comparative Development 1880-2020: A Quantitative Dynamic Analysis

Matteo Cervellati, Gerrit Meyerheim and Uwe Sunde

No 20704, CEPR Discussion Papers from Centre for Economic Policy Research

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.

JEL-codes: O10 (search for similar items in EconPapers)
Date: 2025-10
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