Chakraborty, Shankha

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https://hdl.handle.net/1794/3687

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Browsing Chakraborty, Shankha by Subject "Economic development"

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    Costly Intermediation and the Poverty of Nations
    (University of Oregon, Dept. of Economics, 2003-01-01) Chakraborty, Shankha; Lahiri, Amartya
    Distortions in private investment due to credit frictions, and in public investment due to corruption and bureaucratic inefficiencies, have both been suggested as important factors in accounting for the cross-country per capita income distribution. We introduce two modifications to the standard one-sector neoclassical growth model to incorporate these distortions. The model is calibrated using data from 79 countries to examine the quantitative implication of these margins. We find that financial frictions account for less than 2% of the cross-country variation in relative income. Even accounting for mismeasurement, financial frictions can typically explain less than 5% of the income gap between the five richest and the five poorest countries in the world. Distortions in the public investment process, on the other hand, seem more promising. There is both more variation in the measured value of the public capital distortion and it can account for more than 25% of the income gap between the richest and poorest countries in our sample.
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    Endogenous Lifetime and Economic Growth
    (University of Oregon, Dept. of Economics, 2002-01-26) Chakraborty, Shankha
    Conventional wisdom attributes the severity of mortality in poorer countries to widespread poverty and inadequate living conditions. This paper considers the possibility that persistent poverty may arise, in turn, from a high incidence of mortality. Endogenous mortality risk is introduced in a two-period overlapping generations model: probability of survival from the first period to the next depends upon health capital that can be augmented through public investment. High mortality societies do not grow fast since shorter lifespans discourage saving and investment; multiple steady-states are possible. High mortality also reduces returns on investments, like education, where risks are undiversifiable. When human capital drives economic growth, countries differing in only health capital do not converge to similar living standards; 'threshold effects' may also result.
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    Mortality, Human Capital and Persistent Inequality
    (University of Oregon, Dept. of Economics, 2003-03-20) Chakraborty, Shankha; Das, Mausumi
    Available evidence suggests high intergenerational correlation of economic status, and persistent disparities in health status between the rich and the poor. This paper proposes a novel mechanism linking the two. We introduce health human capital into a two-period overlapping generations model. Private health investment improves the probability of surviving from the first period of life to the next and, along with education, enhances an individual’s labor productivity. Poorer parents are of poor health, unable to invest much in reducing mortality risk and improving their human capital. Consequently, they leave less for their progeny. Despite convex preferences, technology and complete markets, initial differences in economic and health status may perpetuate across generations.