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William Easterly

“The correlation of per capita income in 1960 with per capita income in 1999 is 0.87. Most of countries’ relative performance is explained by the point they had already reached by 1960.”

From Handbook of economic growth 2005. Easterly writes a fantastic chapter casting doubt on the ability of policy to really change economic outcomes. In another paper (1993) he shows the very high correlation between economic position in 1870 and 1987. This means that the economic position of countries today is highly reliant on the economic legacies of the colonial era and that data from 1960 can only tell us so much. That is why studying the period of the 19th century is so important in understanding contemporary economic growth.

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