Department of Economics and Business Economics

The agricultural and the democratic transitions: Causality and the Roundup model

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  • Wp09 06

    Final published version, 192 KB, PDF document

  • Erich Gundlach, Kiel Institute for the World Economy, Germany
  • Martin Paldam
  • School of Economics and Management
Long-run development (in income) causes a large fall in the share of agriculture commonly known as the agricultural transition. We confirm that this conventional wisdom is strongly supported by the data. Long-run development (in income) also causes a large increase in democracy known as the democratic transition. Elsewhere we have shown that it is almost as strong as the agricultural transition. Recently, a method has been presented to weed out spuriousness. It makes the democratic transition go away by turning income insignificant, when it is supplemented by a set of formal controls. We show that the same method makes the agricultural transition go away as well. Hence, it seems to be a method that kills far too much, as suggested by the subtitle. This suggestion leads to a discussion of the very meaning of long-run causality.
Original languageEnglish
Place of publicationAarhus
PublisherInstitut for Økonomi, Aarhus Universitet
Number of pages19
Publication statusPublished - 2009

    Research areas

  • Long-run growth, transitions, causality and spuriousness

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