Time and the Deep Determinants: Tortoise or Hare?

Abstract

We show how to recover observed upper bounds on the contribution to long-run average annualized growth rates attributable to the so-called deep determinants of growth-geography, institutions, culture, and genetic proximity-from a literature that has focused empirically on levels of income. Our analysis shows that each deep determinant has a small impact on long run average growth rates, except for institutions which have a non-negligible upper bound. Our analysis also raises critical issues that have not received sufficient attention in the literature: the time-horizons over which the deep-determinants act and the triggering events that set in them in motion. Taken together, our paper emphasizes that time is essential for the deep determinants to have a meaningful impact on development.

Keywords: Time, Growth, Geography, Culture, Institutions, Genetic Proximity, Deep Determinants

JEL Classification: O4, N1, E0