The Econometrics of Holodomor.

Spoiler: Using a large new data set based on Soviet sources, Markevich et.al. show that the Holodomor was a deliberate attack on Ukrainians by Stalin. (If you like me want to read the whole paper, you can buy it here for $5 plus taxes.)

Since Ukrainian mortality rates were not higher during the famine 1892 or before and after the famine years 1932-1933, there must be other factors at play. These factors were Stalin and his henchmen. Using econometric methods, Markevich et. al. show that higher famine mortality in ethnic Ukrainian areas was the result of Stalin targeting Ukrainians wherever they were living. Centrally planned policies targeted Ukrainians populated areas in Belarus, Russia and Ukraine specifically. In these countries, in provinces in these countries, in districts in provinces in these countries. Wherever there was a concentration of Ukrainians, larger grain procurements were implemented, harsher collectivisation measures were implemented, and tractors were denied.

Markevich et. al. reach this conclusion through econometric analyses.  In the analyses, a large number of factors which potentially could explain the higher Ukrainian excess mortalities, are controlled for. This doesn’t affect the conclusion.

The only thing left is Stalin. Stalin’s hatred of Ukrainians explains the higher mortality rates in areas with a high Ukrainian share of the population.

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What are Swedish midwifes doing?

Spoiler: Swedish midwifes are doing the wrong things. Despite what the media report about the midwifes’ work-life conditions, we have never had so many midwifes in Sweden.That may partly be explained by a favourable wage development. Midwifes’ wages relative all other professions have increased over the years.

Since the number of births have increased less than the number of midwifes, midwifes should be able to spend more time with delivering women and their infants. So why can’t they? Because they’re doing more and different tasks than before. Therefore, hiring more midwifes or raising their wages won’t help.

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Confusions about democracy and prosperity

Spoiler: in a previous post, I claimed that there was a positive relationship between prosperity and high quality institutions. Some people go further and argue that democracy leads to growth and prosperity as this influential study argues. Other people think that the causality is reversed. The effects of democracy on growth and prosperity occur through better conditions for people to engage in entrepreneurial activities, to save, and invest in both physical and human capital. These conditions are determined by the quality of institutions.

Property rights, rule and law and control of corruption are regarded as key institutions for growth. But not everyone is convinced which you can see here. Critics of instutions’ role for growth and prosperity see the devleopments of traditional growth theory variables as independent of institutional changes.

In this post I will have a look at some countries where it seems that institutions don’t matter (much) or that growth precedes democracy and high-quality institutions. And maybe you can have high quality institutions that are good for growth without democracy. You can also find examples of countries where the regimes don’t seem to care a lot of growth, on the contrary, they fear growth as it may serve to undermine them.

If you’re not confused now, don’t worry. You will be.

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How Sweden chose lower growth

Spoiler: SwedishGDP per capita growth is declining. The decline is mainly due to decreasing growth of GDP per hours worked. While average hours worked, the employment rate and the labour force participation rate worked in the other direction, the contributions from these factors are small. The working-age population rate continue to decrease.

The declining growth rates of GDP per hours worked are a consequence of how patterns of consumption change when incomes increase. As incomes increase, demand shifts from goods to services. The relatively stronger demand for services leads to a reallocation of capital and labour towards these industries from goods-producing industries.

The shift leads to a change in the industrial structure which reduces overall GDP per capita growth through two channels. Firstly, increasing shares of services in overall consumption, increases the weight of services industries relative to manufacturing industries. Secondly, services industries’ productivity growth is lower than manufacturing industries’ productivity growth. Thus, the contribution of the less productive services industries, to GDP per capita growth, increase at the expense of the more productive manufacturing industries.  

This may not be as worrying as one might think. It is partly a consequence of increasing living standards. As our incomes increase, we spend more on services than on goods. The decreasing working-age population rate is also a consequence of increasing living standards. As incomes increase, people choose to have smaller families.

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