Richard Hornbeck

Economic Dynamics in the Malthusian Era: Evidence from the 1609 Spanish Expulsion of the Moriscos

We investigate economic dynamics in the Malthusian era using the 1609 expulsion of Moriscos from Spain. Sharp population declines in former‐Morisco districts were accompanied by decreased output and increased per capita output. While these short‐run results are consistent with standard Malthusian predictions, Malthusian convergence was delayed up to 1786 in former‐Morisco districts. Archival sources and historical accounts suggest extractive institutions and cultural differences may have contributed to delayed convergence in population and output per capita. This historic episode provides an unusually rich setting to examine Malthusian dynamics, highlighting the potential for sustained differences in per capita output in the Malthusian era.

Price Discrimination and Smuggling of AIDS Drugs

Patent-holding pharmaceutical companies are shown to be imperfectly able to charge differential prices for AIDS drugs due to the potential for black market exchange. Thus, greater segmentation in the international market through additional barriers to smuggling would induce firms to charge lower prices for AIDS drugs in poorer countries. Without these additional barriers, widespread drug distribution through mandated lower prices or weakened patent protection in the developing world would result in smuggling, undercutting demand in developed markets and reducing firms’ research incentives. By contrast, further market segmentation would allow policy makers to go beyond the induced price cuts and remove patent protection in many markets where the benefits to increased distribution would likely outweigh the losses to research incentives.