Patience and long-run growth

Hübner, Malte and Vannoorenberghe, Gonzague (2015): Patience and long-run growth.

Abstract

Complementing research on the effect of patience on individual behavior, we present empirical evidence that patience is an important determinant of long-run income differences between countries. To account for a potential endogeneity bias, we instrument patience by information on how languages spoken in the countries of our sample require speakers to encode time. The economic impact of patience and growth is sizable. Our results suggest that increasing patience by one standard deviation raises per-capita income by between 34% and 78%.

• Item Type: MPRA Paper
• Language: English
• Keywords: long-run growth; time-preferences; patience
• Subjects: D - Microeconomics > D9 - Intertemporal Choice > D91 - Intertemporal Household Choice ; Life Cycle Models and Saving; E - Macroeconomics and Monetary Economics > E0 - General > E03 - Behavioral Macroeconomics; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Empirical Studies of Economic Growth ; Aggregate Productivity ; Cross-Country Output Convergence; Z - Other Special Topics > Z1 - Cultural Economics ; Economic Sociology ; Economic Anthropology > Z13 - Economic Sociology ; Economic Anthropology ; Social and Economic Stratification

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