Journal on Policy and Complex Systems
At first glance , the distribution of log GDP per capita appears to be roughly approximated by the unimodal Gaussian ( which implies a lognormal distribution of GDP per capita ).
Taking a finer-grained kernel bandwidth , however , shows some underlying noise in the distribution . The empirical density has a skewness of 0.04386 which is close to the Gaussian value of 0 , but the kurtosis ( 2.0537 ) is lower than the Gaussian value of 3 . Formal normality tests of this distribution can be found in Table 4 . The p-values are sufficiently low for us to reject the hypothesis of ( log ) normality .
To conclude , we find a significant degree of dispersion in the distribution GDP per capita , with the distribution appearing to be roughly unimodal and symmetric once logarithms are taken , which indicates some degree of accord with the predicted lognormal distribution . The empirical data do not fit the lognormal density perfectly , however , as shown by formal statistical tests . While we consider that the lognormal gives an acceptable first approximation , further refinements to the basic model would be helpful in providing a closer fit to the empirical density .
Table 4 . Testing for ( log ) normality
Shapiro – Wilk |
W |
V |
Z |
p-value |
Obs . |
|
0.97457 |
3.478 |
2.854 |
0.00216 |
181 |
Shapiro – Francia |
W ’ |
V ’ |
Z |
|
|
|
0.97819 |
3.226 |
2.427 |
0.00761 |
181 |
SK test |
Pr ( skewness ) |
Pr ( kurtosis ) |
Adj . χ 2 ( 2 ) |
|
|
|
0.803 |
0.000 |
19.10 |
0.0001 |
181 |
5 . Implications of the Model
A
number of implications can be drawn from this simple model :
1 . Our model suggests that economic success is a collective outcome , it is a team effort , rather than due to one rational individual acting alone . Our approach differs from the conventional economic view in that it doesn ’ t emphasize how non-cooperative behaviour is the “ winning ” strategy to be chosen by rational agents ( Ghoshal , 2005 ). Instead , it emphasizes interdependence and collective action , in the context of broad-based institutional support . Economic development depends on the strength of societies and their institutions ( Acemoglu & Robinson , 2012 ), rather than the strength of individuals . The success of the individual depends on a much wider collection of institutions on which the individual is dependent . Therefore , our model suggests that inequality in the levels of development of institutions should be kept low . We
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