Leonard Dudley | Université de Montréal (original) (raw)

Papers by Leonard Dudley

Research paper thumbnail of Fit or Fat?" Government and Productivity Growth

Research paper thumbnail of Trade Decisions Under Uncertainty: Discontinuous Lagged Responses to Price and Income Changes

Research paper thumbnail of Directed Technical Change and International Trade

Recent changes in comparative advantage in the largest OECD economies differ significantly from t... more Recent changes in comparative advantage in the largest OECD economies differ significantly from the predictions of Heckscher-Ohlin-Vanek theory. Japan's rising share of OECD machinery exports and the improvement in the comparative advantage of the USA and Germany in heavy industry were accompanied by growing scarcities of the factors used intensively in the favored sector of each country. Here we examine Acemoglu's (1998, 2002) hypothesis that technical change may be directed toward raising the marginal productivity of abundant factors. Testing this hypothesis with 1970-1992 export data from 14 OECD countries, we find evidence that international comparative advantage was reshaped by innovation biased toward the abundant factors in the largest economies.

Research paper thumbnail of Kyklos ARMS AND THE MAN : WORLD WAR I AND THE RISE OF THE WELFARE STATE 1

Neither democracy nor globalization alone can explain the doubling of the peacetime public share ... more Neither democracy nor globalization alone can explain the doubling of the peacetime public share in many Western countries between World Wars I and II. Here we examine two other explanations that are consistent with the timing of the observed changes, namely, (1) a shift in the demand for public goods and (2) the effect of war on the willingness to share. We first model each of these approaches as a contingency-learning phenomenon within Schelling’s Multi-Person Dilemma. We then derive verifiable propositions from each hypothesis. National time series of public spending as a share of GNP reveal no unit root but a break in trend, a result shown to favor explanation (2) over (1). JEL Code: H5

Research paper thumbnail of Mothers of Innovation: How Expanding Social Networks Gave Birth to the Industrial Revolution

Research paper thumbnail of The Two Germanies: Information Technology and Economic Divergence, 1949-1989

Journal of Institutional and Theoretical Economics-zeitschrift Fur Die Gesamte Staatswissenschaft, 1999

Post reunification estimates of East German per capita income were barely one-half the officially... more Post reunification estimates of East German per capita income were barely one-half the officially reported level. This paper tries to explain this discrepancy and to account for the implied postwar economic divergence between the two Germanies. The statistical discrepancy is attributed to a deterioration in the quality of East German production that coincided with the introduction of information technologies. Institutional arrangements were not allowed to adapt and became inefficient. Economic divergence is explained with a model of collusion in which the East German regime failed to make the necessary structural adjustment.

Research paper thumbnail of The Singularity of Western Innovation

Research paper thumbnail of Necessity's Children? The Inventions of the Industrial Revolution

What does it take for a society to be able to innovate? According to recent historical studies by... more What does it take for a society to be able to innovate? According to recent historical studies by Mokyr (2009), Allen (2009) and Acemoglu & Robinson (2012), the society’s institutions must be able to meet its needs, as expressed by factor prices. However, this approach fails to explain why between 1700 and 1850, the well-organized markets of the commercially-oriented Netherlands failed to generate innovation while the lesscompetitive markets of absolutist France yielded numerous key technologies. This paper presents a complementary approach that emphasizes social networks, distinguishing between cooperative and non-cooperative innovations. The empirical results, based on data covering 117 important innovations and 201 regions in ten countries, suggest that ideology and factor prices played a role for the simpler non-cooperative subset. However, for the more complex cooperative innovations, the keys were literacy, language standardization and the openness of the social structure.

Research paper thumbnail of Learning and Productivity Change in Metal Products

The American Economic Review, 1972

Research paper thumbnail of A Model of Interregional Adjustment

Research paper thumbnail of A Non-Cooperative Model of Alliances and Welfare

Research paper thumbnail of Yesterday's Games: Contingency Learning and the Growth of Public Spending

Between 1890 and 1938, the public share of total spending rose to unprecedented peacetime levels ... more Between 1890 and 1938, the public share of total spending rose to unprecedented peacetime levels in many Western countries. This development has been explained by either (i) a shift in the demand for public goods or (ii) a restructuring of the state to transfer income. However, neither explanation has been shown to be compatible with individual incentives. Here, we model the rise of public spending as a contingency-learning phenomenon within Schelling’s Multi- Person Dilemma. Tests of the resulting propositions with national time series reveal no unit root but a break in trend, a result shown to favor explanation (ii) over (i).

Research paper thumbnail of Bilateral Trade Flows Under Endogenous Stabilization Policy

Research paper thumbnail of A Spatial Model of the State

Economists generally assume that political institutions are inefficient.1 Recently, however, it h... more Economists generally assume that political institutions are inefficient.1 Recently, however, it has been proposed that under competition, political markets are as efficient as economic markets.2 According to this hypothesis, in a democratic state, political competition will tend to eliminate rents, leading to an efficient allocation of public resources. It should be noted that this theory has several important corollaries that may be tested empirically. First, it predicts that voters in democratic states will be indifferent to political boundaries: competition should tend to make resource allocation independent of political institutions. Second, the theory predicts that residents of democratic states will be insensitive to the level of political decentralization: whether a service is supplied by local employees of a central government or by a lower level of jurisdiction,

Research paper thumbnail of Some Economic Implications of Learning to Learn

Research paper thumbnail of A Model of the Supply of Bilateral Foreign Aid

Despite the attention that has been paid to foreign aid in recent years, there has been very litt... more Despite the attention that has been paid to foreign aid in recent years, there has been very little empirical research to ex-plain actual transfers of public funds be-tween donors and recipients. Many au-thors have indeed discussed the possible motives of donor ...

Research paper thumbnail of The Uniqueness of Western Innovation, 1700-1850

Between 1700 and 1850, people in several urban regions of Western Europe and North America learne... more Between 1700 and 1850, people in several urban regions of Western Europe and North America learned to innovate at a rate that was unprecedented in world history. The explanations of the Industrial Revolution offered recently by Mokyr (2009) and Allen (2009) – namely, national differences in institutions, ideology and factor prices – fail to explain the differences between innovating and non-innovating regions within states. This paper first explores how the structure of social networks affects people’s ability to innovate. The study then tests this social-networking approach. With a sample of 201 urban regions and 117 innovations from the period 1700-1850, it is shown that the institutions and market conditions have less explanatory power than three variables which capture the roles of agents in social networks. The latter influences were missing in eighteenth-century China.

Research paper thumbnail of Language standardization and the Industrial Revolution

Oxford Economic Papers

Why did the countries with the highest literacy rates fail to contribute to the innovations of th... more Why did the countries with the highest literacy rates fail to contribute to the innovations of the Industrial Revolution? Recent empirical research shows that people tend to mistrust those perceived to speak with an accent. Here the hypothesis of a link between language, trust and innovation is tested with a new data set comprising 201 urban regions and 117 important innovations between 1700 and 1850. In the three states that contributed almost all of these innovations (Britain, France and the USA), rising literacy was merely the first step toward the formation of large networks of people speaking standardized languages. These networks proved particularly important for advances requiring collaboration. Elsewhere, where language standardization was delayed, innovation also came later.

Research paper thumbnail of General Purpose Technologies and the Industrial Revolution

Did breakthroughs in core processes during the Industrial Revolution tend to generate further inn... more Did breakthroughs in core processes during the Industrial Revolution tend to generate further innovations in downstream technologies? Here a theoretical model examines the effect of a political shock on a non-innovating society in which there is high potential willingness to cooperate. The result is regional specialization in the innovation process by degree of cooperation. tests with a zero-inflated Poisson specification indicate that 116 important innovations between 1700 and 1849 may be grouped into three categories: (1) General Purpose Technologies (GPTs) tended to be generated in large states with standardized languages following transition to pluralistic political systems; (2) GPTs in turn generated spillovers for their regions in technologies where cooperation was necessary to integrate distinct fields of expertise; (3) however, GPTs discouraged downstream innovation in their regions where such direct cooperation was not required.

Research paper thumbnail of The word and the sword

Research paper thumbnail of Fit or Fat?" Government and Productivity Growth

Research paper thumbnail of Trade Decisions Under Uncertainty: Discontinuous Lagged Responses to Price and Income Changes

Research paper thumbnail of Directed Technical Change and International Trade

Recent changes in comparative advantage in the largest OECD economies differ significantly from t... more Recent changes in comparative advantage in the largest OECD economies differ significantly from the predictions of Heckscher-Ohlin-Vanek theory. Japan's rising share of OECD machinery exports and the improvement in the comparative advantage of the USA and Germany in heavy industry were accompanied by growing scarcities of the factors used intensively in the favored sector of each country. Here we examine Acemoglu's (1998, 2002) hypothesis that technical change may be directed toward raising the marginal productivity of abundant factors. Testing this hypothesis with 1970-1992 export data from 14 OECD countries, we find evidence that international comparative advantage was reshaped by innovation biased toward the abundant factors in the largest economies.

Research paper thumbnail of Kyklos ARMS AND THE MAN : WORLD WAR I AND THE RISE OF THE WELFARE STATE 1

Neither democracy nor globalization alone can explain the doubling of the peacetime public share ... more Neither democracy nor globalization alone can explain the doubling of the peacetime public share in many Western countries between World Wars I and II. Here we examine two other explanations that are consistent with the timing of the observed changes, namely, (1) a shift in the demand for public goods and (2) the effect of war on the willingness to share. We first model each of these approaches as a contingency-learning phenomenon within Schelling’s Multi-Person Dilemma. We then derive verifiable propositions from each hypothesis. National time series of public spending as a share of GNP reveal no unit root but a break in trend, a result shown to favor explanation (2) over (1). JEL Code: H5

Research paper thumbnail of Mothers of Innovation: How Expanding Social Networks Gave Birth to the Industrial Revolution

Research paper thumbnail of The Two Germanies: Information Technology and Economic Divergence, 1949-1989

Journal of Institutional and Theoretical Economics-zeitschrift Fur Die Gesamte Staatswissenschaft, 1999

Post reunification estimates of East German per capita income were barely one-half the officially... more Post reunification estimates of East German per capita income were barely one-half the officially reported level. This paper tries to explain this discrepancy and to account for the implied postwar economic divergence between the two Germanies. The statistical discrepancy is attributed to a deterioration in the quality of East German production that coincided with the introduction of information technologies. Institutional arrangements were not allowed to adapt and became inefficient. Economic divergence is explained with a model of collusion in which the East German regime failed to make the necessary structural adjustment.

Research paper thumbnail of The Singularity of Western Innovation

Research paper thumbnail of Necessity's Children? The Inventions of the Industrial Revolution

What does it take for a society to be able to innovate? According to recent historical studies by... more What does it take for a society to be able to innovate? According to recent historical studies by Mokyr (2009), Allen (2009) and Acemoglu & Robinson (2012), the society’s institutions must be able to meet its needs, as expressed by factor prices. However, this approach fails to explain why between 1700 and 1850, the well-organized markets of the commercially-oriented Netherlands failed to generate innovation while the lesscompetitive markets of absolutist France yielded numerous key technologies. This paper presents a complementary approach that emphasizes social networks, distinguishing between cooperative and non-cooperative innovations. The empirical results, based on data covering 117 important innovations and 201 regions in ten countries, suggest that ideology and factor prices played a role for the simpler non-cooperative subset. However, for the more complex cooperative innovations, the keys were literacy, language standardization and the openness of the social structure.

Research paper thumbnail of Learning and Productivity Change in Metal Products

The American Economic Review, 1972

Research paper thumbnail of A Model of Interregional Adjustment

Research paper thumbnail of A Non-Cooperative Model of Alliances and Welfare

Research paper thumbnail of Yesterday's Games: Contingency Learning and the Growth of Public Spending

Between 1890 and 1938, the public share of total spending rose to unprecedented peacetime levels ... more Between 1890 and 1938, the public share of total spending rose to unprecedented peacetime levels in many Western countries. This development has been explained by either (i) a shift in the demand for public goods or (ii) a restructuring of the state to transfer income. However, neither explanation has been shown to be compatible with individual incentives. Here, we model the rise of public spending as a contingency-learning phenomenon within Schelling’s Multi- Person Dilemma. Tests of the resulting propositions with national time series reveal no unit root but a break in trend, a result shown to favor explanation (ii) over (i).

Research paper thumbnail of Bilateral Trade Flows Under Endogenous Stabilization Policy

Research paper thumbnail of A Spatial Model of the State

Economists generally assume that political institutions are inefficient.1 Recently, however, it h... more Economists generally assume that political institutions are inefficient.1 Recently, however, it has been proposed that under competition, political markets are as efficient as economic markets.2 According to this hypothesis, in a democratic state, political competition will tend to eliminate rents, leading to an efficient allocation of public resources. It should be noted that this theory has several important corollaries that may be tested empirically. First, it predicts that voters in democratic states will be indifferent to political boundaries: competition should tend to make resource allocation independent of political institutions. Second, the theory predicts that residents of democratic states will be insensitive to the level of political decentralization: whether a service is supplied by local employees of a central government or by a lower level of jurisdiction,

Research paper thumbnail of Some Economic Implications of Learning to Learn

Research paper thumbnail of A Model of the Supply of Bilateral Foreign Aid

Despite the attention that has been paid to foreign aid in recent years, there has been very litt... more Despite the attention that has been paid to foreign aid in recent years, there has been very little empirical research to ex-plain actual transfers of public funds be-tween donors and recipients. Many au-thors have indeed discussed the possible motives of donor ...

Research paper thumbnail of The Uniqueness of Western Innovation, 1700-1850

Between 1700 and 1850, people in several urban regions of Western Europe and North America learne... more Between 1700 and 1850, people in several urban regions of Western Europe and North America learned to innovate at a rate that was unprecedented in world history. The explanations of the Industrial Revolution offered recently by Mokyr (2009) and Allen (2009) – namely, national differences in institutions, ideology and factor prices – fail to explain the differences between innovating and non-innovating regions within states. This paper first explores how the structure of social networks affects people’s ability to innovate. The study then tests this social-networking approach. With a sample of 201 urban regions and 117 innovations from the period 1700-1850, it is shown that the institutions and market conditions have less explanatory power than three variables which capture the roles of agents in social networks. The latter influences were missing in eighteenth-century China.

Research paper thumbnail of Language standardization and the Industrial Revolution

Oxford Economic Papers

Why did the countries with the highest literacy rates fail to contribute to the innovations of th... more Why did the countries with the highest literacy rates fail to contribute to the innovations of the Industrial Revolution? Recent empirical research shows that people tend to mistrust those perceived to speak with an accent. Here the hypothesis of a link between language, trust and innovation is tested with a new data set comprising 201 urban regions and 117 important innovations between 1700 and 1850. In the three states that contributed almost all of these innovations (Britain, France and the USA), rising literacy was merely the first step toward the formation of large networks of people speaking standardized languages. These networks proved particularly important for advances requiring collaboration. Elsewhere, where language standardization was delayed, innovation also came later.

Research paper thumbnail of General Purpose Technologies and the Industrial Revolution

Did breakthroughs in core processes during the Industrial Revolution tend to generate further inn... more Did breakthroughs in core processes during the Industrial Revolution tend to generate further innovations in downstream technologies? Here a theoretical model examines the effect of a political shock on a non-innovating society in which there is high potential willingness to cooperate. The result is regional specialization in the innovation process by degree of cooperation. tests with a zero-inflated Poisson specification indicate that 116 important innovations between 1700 and 1849 may be grouped into three categories: (1) General Purpose Technologies (GPTs) tended to be generated in large states with standardized languages following transition to pluralistic political systems; (2) GPTs in turn generated spillovers for their regions in technologies where cooperation was necessary to integrate distinct fields of expertise; (3) however, GPTs discouraged downstream innovation in their regions where such direct cooperation was not required.

Research paper thumbnail of The word and the sword