Understanding the Mechanisms of Economic Development

Angus Deaton ()

No 1225, Working Papers from Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies.

Abstract: I argue that progress in understanding economic development (as in other branches of economics) must come from the investigation of mechanisms; the associated empirical analysis can usefully employ a wide range of experimental and non-experimental methods. I discuss three different areas of research: the life-cycle saving hypothesis and its implication that economic growth drives higher rates of national saving, the theory of speculative commodity storage and its implications for the time-series behavior of commodity prices, and the relationship between economic growth and nutritional improvement. None of these projects has yet been entirely successful in offering a coherent account of the evidence, but all illustrate a process of trial and error, in which although mechanisms are often rejected, unlikely theoretical propositions are sometimes surprisingly verified, while in all cases there is a process of learning about and subsequently modifying our understanding of the underlying mechanisms.

Keywords: economic development; mechanisms; life-cycle savings; commodity prices; economic growth; nutritional improvement (search for similar items in EconPapers)
JEL-codes: D10 D60 E01 I00 O40 (search for similar items in EconPapers)
Date: 2010-04
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Journal Article: Understanding the Mechanisms of Economic Development (2010)
Working Paper: Understanding the mechanisms of economic development (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pri:rpdevs:deaton_understanding_mechanisms_of_economic_development_with_abstract_apr_2010.pdf

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