The Elite Quality Index 2026 (EQx2026), the seventh edition of the world's leading comparative political economy index, ranks 151 countries by the quality of their elite business models. Elite quality is defined as the capacity of elites to create sustainable value for society rather than extract it through rent-seeking and other value-transfer activities. Drawing on 148 indicators, the EQx operationalises elite quality on a global scale, offering a comparative lens on long-term economic growth and human development. Singapore maintains the top position in the EQx2026 for the seventh consecutive year. The United States surged back last year and retains the second place, powered primarily by its commanding lead in artificial intelligence. Japan rises to third, while China delivers one of the most remarkable performances, climbing eight places to #11 which is the highest ranking ever for a non-advanced economy. Overall, Asian economies continue to strengthen their position in global elite quality. The results also highlight important trends: several traditional high performers (Switzerland, UK, Australia, Israel, Norway) are experiencing mostly minor but steady declines, underscoring that elite quality is not permanent: it requires continuous creative destruction, sustained value creation through productive risk-taking, and the constant constraining of value-transfer activities. In parallel, many emerging markets (Brazil, Turkey, Egypt, South Africa) show significant recovery. Europe continues to lead in the Next Generation Value Creation Barometer (NGVCb), yet its overall elite quality is declining, raising concerns about long-term intergenerational sustainability. The EQx2026 underscores that high-quality elite systems are those that effectively convert coordination capacity into broad-based value creation and minimize value transfers.

This paper estimates a Behavioural New Keynesian (BNK) model incorporating belief heterogeneity through a switching mechanism. Agents form expectations using either a forward-looking (rational) or backward-looking (extrapolative) rule, and their weights evolve endogenously based on past forecast performance. To identify the latent structural shocks and the time-varying composition of beliefs over the business cycle, we apply a simulation-based nonlinear filtering and backward smoothing routine, which recovers full-sample paths of unobserved states consistent with both equilibrium restrictions and observed macroeconomic data. Our results show that belief heterogeneity has moderate quantitative effects during normal times but significantly amplifies macroeconomic dynamics during periods of large shocks, such as the COVID-19 crisis. This highlights some limitations of rational expectations models and points to the relevance of endogenous expectation formation for business cycle analysis.

Can capital accumulation sustain endogenous growth without imposing knife-edge linearity of aggregate technology in capital? This paper shows that it can, even when productivity is simultaneously shaped by diminishing-return capital spillovers.In a model with hybrid capital spillovers—a diminishing-return component and an AK-type component—the long-run dynamics exhibit growth regime selection in capital-based environments. The economy converges to fully endogenous growth if and only if the equilibrium saving rate exceeds a critical threshold; otherwise it converges to a semi-endogenous path tied to population growth.The result provides a tractable criterion for when an AK-type growth engine survives in the presence of diminishing spillovers, turning the AK versus semi-endogenous distinction into an equilibrium outcome governed by saving behavior and spillover structure. A calibration using U.S. national accounts data suggests that the economy operates in the endogenous regime, though relatively close to the regime boundary.

A book chapter on explaining the quality of elites in India and how do they interact with the society.

This paper examines how the interaction between natural selection, household education choices and R&D activities influences macroeconomic growth. We develop an innovation-driven growth model that integrates household heterogeneity in educational ability with endogenous fertility and the activation of innovation. Our findings reveal that households with lower educational abilities accumulate less human capital but have more offspring and initially gain a temporary evolutionary advantage. This demographic shift enhances the likelihood of innovation taking off; however, the resulting reduction in the share of high-ability households ultimately constrains R&D efforts and slows long-term economic growth. We empirically validate our theoretical model using cross-country data and instrumental variables, demonstrating that disparities in educational ability negatively impact education, innovation and growth over the long run. This study provides new insights into the complex dynamics between natural selection, endogenous fertility and economic development, with significant implications for both policy and theory.

This study introduces automation into a Schumpeterian growth model to explore the effects of R&D and automation subsidies. R&D subsidy increases innovation and growth but decreases the share of automated industries and the degree of capital intensity in the aggregate production function. Automation subsidy has the opposite effects on these macroeconomic variables. Calibrating the model to US data, we find that raising R&D subsidy increases the welfare of high-skill workers but decreases the welfare of low-skill workers and capital owners, whereas increasing automation subsidy increases the welfare of high-skill workers and capital owners but decreases the welfare of low-skill workers. Therefore, whether the government should subsidize innovation or automation depends on how it evaluates the welfare gains and losses of different agents in the economy.

Is growth ultimately fully endogenous or semi-endogenous? Three decades of theoretical and empirical growth economics have kept both possibilities open. Here, R&D-driven growth is a general combination of both semi-endogenous and fully endogenous mechanisms.I demonstrate that if the semi-endogenous growth component is indispensable to the actual growth mechanism, the long-run growth rate follows the semi-endogenous growth predictions. Conversely, if the semi-endogenous growth is non-essential and the world population experiences slow growth, the fully en-dogenous growth mechanism could dictate the long run, even if it is not essential.If no other (third) growth mechanism exists, a criterion sufficient to ascertain the essentiality of semi -endogenous growth is that reduced research consistently leads to fewer innovations.If an unknown third growth engine exists, the steady state remains semi-endogenous, provided the essentiality criterion is met. Regardless of how this third factor impacts short-term growth, semi-endogenous growth will prevail in the long run.(c) 2023 The Author(s). Published by Elsevier Inc. This is an open access article under the CC BY license (http://creativecommons .org /licenses /by /4 .0/).

Based on the main insights of Schumpeterian growth theory, this paper investigates which R&D-based mechanism is better suited for explaining the pattern of world’s productivity growth. Using post-WWII data for a global sample of 115 countries, we estimate the relationship between productivity growth and the semi- endogenous and fully-endogenous growth components. We show that the semi-endogenous mechanism, based on the assumption of diminishing returns to knowledge, is the prevailing force and accounts for a larger share of world’s productivity growth.

Shall vaccine patents be temporarily suspended? In a simple model, I reflect the essence of the debate on the Covid-19 patent waiver. The central message is that if the probability of imitating innovative vaccines is low, then a patent waiver would be harmless to future R&D. Conversely, a patent waiver would be undesirable if it is too easy to imitate future innovations.This paper also derives a simple policy rule for R&D subsidies that governments can use to correct the adverse effects of the waiver on the incentives to innovate.The vaccine industry is highly concentrated. While the social gains from successful imitation are huge, it is hard to transfer vaccine know-how from the handful of patent holders to potential imitators. In this environment, loosening intellectual property rights (IPRs) protection in a pandemic has significant macroeconomic advantages. Still, it may harm future innovation because it would create an expectation of future IPRs waivers. This paper allows an upbeat assessment of the conditions that make a patent waiver desirable, even considering the future R&D implications. Moreover, it shows how reasonably minimal rises of R&D subsidies can overcome the IPRs uncertainty.