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TDPE presents: Mike Waugh

060 Eggers Hall

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 Specialization, Economic Development and Aggregate Productivity Differences Authors: David Lagakos & Michael E. Waugh Cross-country labor productivity differences are large in agriculture and much smaller in nonagriculture. We argue that these relative productivity differences arise when subsistence consumption needs prevent workers in poor countries from specializing in the sector in which they are most productive. We formalize our theory by embedding the Roy (1951) model of ability into a two-sector general-equilibrium growth model in which the agents’ preferences feature a subsistence food requirement. A parameterized version of the model predicts that output per worker gaps will be substantially larger across countries in agriculture than non-agriculture even though countries differ only by a sector-neutral efficiency term. Mike Waugh is Assistant Professor of Economics at NYU’s Stern School of Business. His recent work has been published in the American Economic Review.

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Exterior of Maxwell in black and white when there was no Eggers building

We’re Turning 100!

To mark our centennial in the fall of 2024, the Maxwell School will hold special events and engagement opportunities to celebrate the many ways—across disciplines and borders—our community ever strives to, as the Oath says, “transmit this city not only not less, but greater, better and more beautiful than it was transmitted to us.”

Throughout the year leading up to the centennial, engagement opportunities will be held for our diverse, highly accomplished community that now boasts more than 38,500 alumni across the globe.