|
on Economic Growth |
| By: | Matthias Doepke (Northwestern University); Michele Tertilt |
| Abstract: | Empirical evidence suggests that money in the hands of mothers (as opposed to fathers) increases expenditures on children. From this, should we infer that targeting transfers to women is good economic policy? In this paper, we develop a non-cooperative model of household decision making to answer this question. We show that when women have lower wages than men, they may spend more on children, even when they have exactly the same preferences as their husbands. However, this does not necessarily mean that giving money to women is a good development policy. We show that depending on the nature of the production function, targeting transfers to women may be beneficial or harmful to growth. In particular, such transfers are more likely to be beneficial when human capital, rather than physical capital or land, is the most important factor of production. |
| Keywords: | Female Empowerment, Gender Equality, Economic Development, Theory of the Household, Marital Bargaining |
| JEL: | D13 J16 O10 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2014-002&r=gro |
| By: | Daron Acemoglu (Department of Economics, Massachusetts Institute of Technology); Ufuk Akcigit (Department of Economic, University of Pennsylvania); Murat Alp Celik (Department of Economic, University of Pennsylvania) |
| Abstract: | This paper argues that openness to new, unconventional and disruptive ideas has a .first-order impact on creative innovations - innovations that break new ground in terms of knowledge creation. After presenting a motivating model focusing on the choice between incremental and radical innovation, and on how managers of different ages and human capital are sorted across different types of .firms, we provide cross-country, firm-level and patent-level evidence consistent with this pattern. Our measures of creative innovations proxy for innovation quality (average number of citations per patent) and creativity (fraction of superstar innovators, the likelihood of a very high number of citations, and generality of patents). Our main proxy for openness to disruption is manager age. This variable is based on the idea that only companies or societies open to such disruption will allow the young to rise up within the hierarchy. Using this proxy at the country, .firm or patent level, we present robust evidence that openness to disruption is associated with more creative innovations. |
| Keywords: | corporate culture, creative destruction, creativity, economic growth, entrepreneurship, individualism, innovation, openness to disruption |
| JEL: | O40 O43 O33 P10 P16 Z1 |
| Date: | 2014–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:14-004&r=gro |
| By: | Samad Sarferaz (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Alexander Rathke (KOF Swiss Economic Institute, ETH Zurich, Switzerland) |
| Abstract: | In the process of economic development economies grow through various regimes, each characterized by different demographic-economic interactions. The changes in these interactions are key elements in different explanations of the escape from Malthusian stagnation. We employ time-varying vector autoregressions, an approach that allows tracking this transition for England in the period between 1541 and 1870. The empirical findings suggest that the link between real wages and population growth was at work until the 19th century. Furthermore, we document changes in the propagation mechanism from real wages on population growth over time that feature prominently in Unified Growth Theory. Most remarkably, in contrast to earlier empirical literature we find strong effects of income on mortality after the 1750s. |
| Keywords: | Industrial Revolution, Malthusian Trap, Time-Varying, Vector Autoregression, Unified Growth Theory |
| JEL: | C32 J13 N13 O11 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:14-351&r=gro |
| By: | DEMUYNCK, Thomas; VAN DE GAER, Dirk |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvrp:-2505&r=gro |
| By: | Casari, Marco (University of Bologna); Lisciandra, Maurizio (University of Messina) |
| Abstract: | Starting from the medieval period, women in the Italian Alps experienced a progressive erosion in property rights over the commons. We collected documents about the evolution of inheritance regulations on collective land issued by hundreds of peasant communities over a period of six centuries (13th-19th). Based on this original dataset, we provide a long-term perspective of decentralized institutional change in which gender-biased inheritance systems emerged as a defensive measure to preserve the wealth of community insiders. This institutional change had implications also for the protection from economic shocks, for population growth, and for marriage strategies. |
| Keywords: | land rights, endogamy, migrations, common property |
| JEL: | J16 N53 Q20 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7938&r=gro |
| By: | Ehrlich, Isaac (University at Buffalo, SUNY); Yin, Yong (University at Buffalo, SUNY) |
| Abstract: | The apparently unrelenting growth in the GDP-share of health spending (SHS) has been a perennial issue of policy concern. Does an equilibrium limit exist? The issue has been left open in recent dynamic models which take income growth and population aging as given. We view these variables as endogenously determined within an overlapping-generations, human-capital-based endogenous-growth model, where a representative parent makes all life-cycle consumption and investment decisions, and life and health protection are subject to diminishing returns. Our prototype model, allowing for both quantity and quality of life as desired goods, yields equilibrium upper bounds for SHS. Our calibrated simulations also account for observed trends in reproductive choices, population aging, life expectancy, and economic growth. The analysis offers new insights about factors that drive long-term trends in aging and health spending and establishes a direct relation between health investments at young age and the equilibrium, steady-state rate of economic growth. |
| Keywords: | endogenous growth, population aging, human capital, health spending, life protection, life expectancy |
| JEL: | I1 I15 O4 E24 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7928&r=gro |
| By: | Andrew E. Clark (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA)); Sarah Flèche (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA)); Claudia Senik (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), UP4 - Université Paris 4, Paris-Sorbonne - Université Paris IV - Paris Sorbonne - Ministère de l'Enseignement Supérieur et de la Recherche Scientifique) |
| Abstract: | In spite of the great U-turn that saw income inequality rise in Western countries in the 1980s, happiness inequality has dropped in countries that have experienced income growth (but not in those that did not). Modern growth has reduced the share of both the "very unhappy" and the "perfectly happy". The extension of public amenities has certainly contributed to this greater happiness homogeneity. This new stylized fact comes as an addition to the Easterlin paradox, offering a somewhat brighter perspective for developing countries. |
| Keywords: | Happiness ; Inequality ; Economic growth ; Development ; Easterlin paradox |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00936145&r=gro |
| By: | Beja Jr., Edsel |
| Abstract: | This paper presents evidence of a positive but very small long run relationship between income growth and happiness, evidence that can disprove the Easterlin Paradox. However, the paper argues that there is actually reason to sustain the paradox because it finds the magnitude of the estimated relationship too small to suggest that income growth has substantial consequence in improving happiness over the long-term. Certainly, the evidence suggests that happiness is more than about raising incomes. This paper argues that a rejection of the paradox is acceptable if and only if the empirical findings indicate economic significance. |
| Keywords: | Easterlin Paradox; income growth; happiness; dynamics |
| JEL: | A20 C53 I30 O40 |
| Date: | 2014–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:53360&r=gro |
| By: | Alessandro Innocenti; Francesca Lorini; Chiara Rapallini (Dipartimento di Scienza per l'Economia e l'Impresa) |
| Abstract: | The paper analyzes the case of Belgium to provide insight into the relationships among ethnic heterogeneity, voting participation and local economic growth. We find that heterogeneity, and external and internal mobility reduce immigrants’ voting participation, while we do not find support for the hypothesis that voting participation is related to local economic growth, with the exception of Flanders, which is the most ethnically homogeneous region of Belgium. This finding is interpreted as showing that an increase in ethnic heterogeneity prevails over other factors in determining local economic performance via a decline in social capital. |
| Keywords: | ethnic heterogeneity, voting, political participation, local economic growth, Tiebout model. |
| JEL: | D72 H4 H7 N4 R1 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2014_03.rdf&r=gro |
| By: | Francisco ALVAREZ-CUADRADO; Ngo Van LONG; Markus POSCHKE |
| Abstract: | Long run economic growth goes along with structural change. Recent work has identified explanatory factors on the demand side (non-homothetic preferences) and on the supply-side, in particular differential productivity growth across sectors and differences in factor proportions and capital deepening. This paper documents that there have also been differential trends in labor and capital income shares across sectors in the U.S. and in a broad set of other industrialized economies, and shows that a model where the degree of capital-labor substitutability differs across sectors is consistent with these trends. The interplay of differences in productivity growth and in the substitution elasticity across sectors drive both the evolution of sectoral factor income shares and the shape of structural change. We evaluate the empirical importance of this mechanism and the other mechanisms proposed in the literature in the context of the recent U.S. experience. We find that differences in productivity growth rates between manufacturing and services have been the most important driver of structural change. Yet, differences in substitution elasticities are key not only for understanding the evolution of sectoral and aggregate factor income shares, but also for the shape of structural change. Differences in capital intensity and non-homothetic preferences have hardly mattered for the manufacturing-services transition. |
| Keywords: | structural change, labor income share, capital-labor substitution |
| JEL: | O40 O30 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:mtl:montec:01-2014&r=gro |
| By: | Bruce E. Hansen (University of Wisconsin-Madison); Ananth Seshadri (University of Wisconsin-Madison) |
| Abstract: | We analyze long-span data on real interest rates and productivity growth with the focus on estimating their long-run correlation. The evidence points to a moderately negative correlation, meaning that real interest rate is mildly countercyclical, although the estimates are not precise. Our best estimate of the long-run correlation is -0.20. The implications for long-term projections are as follows. A negative correlation implies that long-run costs due to a period of low interest rates will tend to be slightly offset by a period of high productivity growth. Conversely, long-run benefits during a period of high interest rates will be offset by low productivity growth. This implication is consistent with the question raised in the Project Solicitation concerning why the trust fund stochastic simulations tend to show less long-run variability than do the alternative assumption projections. We also examine the implications for the variability of long-term projections of trust fund accumulation. As expected, we find that a negative correlation reduces the variability in the stochastic intervals. However, our simplified calculations suggest that the effect is modest. |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:mrr:papers:wp303&r=gro |
| By: | Hakenes , Hendrik (University of Bonn & Max Planck Institute for Research on Collective Goods & Centre for Economic Policy Research /CEPR)); Hasan, Iftekhar (Fordham University and Bank of Finland); Molyneux, Phil (Bangor Business School, Bangor University); Xie , Ru (Bangor Business School, Bangor University) |
| Abstract: | This paper discusses the effects of small banks on economic growth. We first theoretically show that small banks operating at a regional level can spur local economic growth. As compared with big interregional banks, small regional banks are more effective in promoting local economic growth, especially in regions with lower initial endowments and severe credit rationing. We then test the model predictions using a sample of German banks and corresponding regional statistics. We find that small regional banks are more important funding providers in regions with low access to finance. The empirical results support the theoretical hypotheses. |
| Keywords: | small banks; regional economic growth |
| JEL: | G21 O16 R11 |
| Date: | 2014–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2014_005&r=gro |
| By: | Douglas Sutherland; Peter Hoeller |
| Abstract: | Policy reforms aimed at boosting long-run growth often have side effects – positive or negative – on an economy’s vulnerability to shocks and their propagation. Macroeconomic shocks as severe and protracted as those since 2007 warrant a reconsideration of the role growth-promoting policies play in shaping the vulnerability and resilience of an economy to macroeconomic shocks. Against this background, this paper looks at a vast array of policy recommendations by the OECD that promote longterm growth – contained in Going for Growth and the Economic Outlook – and attempts to establish whether they underpin macroeconomic stability or whether there is a trade-off. Les réformes visant à stimuler la croissance à long terme ont souvent des effets secondaires – positifs ou négatifs – sur la vulnérabilité d’une économie face à des chocs et à leur propagation. Des chocs macroéconomiques aussi graves et prolongés que ceux observés depuis 2007 justifient un réexamen de la contribution des politiques de promotion de la croissance à la vulnérabilité et à la résilience d’une économie face à de telles perturbations. Dans cette optique, le présent document passe en revue un large éventail de recommandations d’action formulées par l’OCDE pour encourager la croissance à long terme – qui figurent dans Objectif croissance et les Perspectives économiques – et cherche à déterminer si les actions recommandées favorisent la stabilité macroéconomique ou si des arbitrages s’imposent. |
| Keywords: | business cycles, volatility, economic policy, croissance, cycles d’activité, politique économique, volatilité |
| JEL: | E32 E52 E62 O40 |
| Date: | 2014–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaab:8-en&r=gro |
| By: | Corsi, Daniel J; S V Subramanian |
| Abstract: | Infant and child mortality rates are among the most important indicators of child health, nutrition, implementation of key survival interventions, and the overall social and economic development of a population. In this report, using data from 99 Demographic and Health Surveys (DHS) conducted in 36 sub-Saharan African countries, we investigate factors that have contributed to the declines in under-five mortality rates (U5MR) in sub-Saharan Africa. Specifically, we focus on the extent to which changes in country-level economic growth and changes in the coverage of key maternal, neonatal, and child health (MNCH) interventions have contributed to reductions in under-five mortality. For this analysis we constructed two distinct data structures: (1) an ecological time series (with countries repeatedly observed) and (2) a multilevel repeated cross-section (which in addition took account of the variability between children within a country at any time). We employed a country-level fixed effects regression to model changes in U5MR across survey periods as a function of changes in economic growth and coverage of MNCH interventions for ecological time series data. The multilevel repeated cross-sectional data was used to examine the probability of a child being reported to have died at age 0-59 months, corresponding with different levels of economic growth and coverage, while accounting for within-country between-child factors that could influence both child mortality and the country-level economic development and coverage indicators. Our results show that changes in country-level per capita GDP (pcGDP) are not consistently associated with a reduction in U5MR across different model specifications. In ecological time series models, a unit increase in pcGDP is associated with a reduction in U5MR of 11.6 deaths per 1000 live births (95% CI: -29.1, 5.9), while a composite index of MNCH interventions is associated with a reduction in U5MR of 31.9 deaths per 1000 live births (95% CI: -48.6, -15.3). The results of the multilevel repeated cross-section data structure suggest that MNCH coverage indicators are important. For example, pcGDP is associated for a decreased likelihood of child mortality with an odds ratio of 0.96 (95% CI: 0.92 -1.00) and an increase of 1 standard deviation in the composite coverage index (CCI) is also associated with a decrease in child mortality [odds ratio 0.92 (95% CI: 0.88 - 0.96)]. A measure of improvements in sanitary facilities is associated with an odds ratio of 0.57 (95% CI: 0.50-0.65) for child mortality. Together, these results indicate that MNCH interventions are important in reducing U5MR, while the effects of economic growth in sub-Saharan Africa remain weak and inconsistent. Sub-Saharan Africa continues to have the highest U5MR globally, and progress toward reducing mortality rates has been slow. Our findings indicate that improved coverage of proven life-saving interventions and access to clean water and sanitation will likely contribute to further reductions in U5MR in sub-Saharan Africa in the future. |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:qsh:wpaper:144146&r=gro |
| By: | Carl Grekou |
| Abstract: | In this paper, we revisit the link between currency misalignments and economic growth by taking into account the foreign currency-denominated debt dynamics (except French Franc and euro) for the CFA zone countries over the period 1985-2011. Relying on a BEER approach and using panel cointegration techniques, we first derive currency misalignments. We then estimate a panel smooth transition growth equation that allows us to observe nonlinear impacts of misalignments on both economic growth and foreign currency-denominated debt dynamics. We find that the nonlinear impact of currency misalignments on growth through the competitiveness channel is mitigated by the foreign currency-denominated debt dynamics through a valuation effect. |
| Keywords: | Currency misalignments, CFA zone, debt, economic growth, panel smooth transition regression |
| JEL: | C33 E42 F3 F43 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2014-4&r=gro |