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on Economic Growth |
| By: | Spolaore, Enrico (Tufts University, NBER, CESIfo, and CAGE); Wacziarg, Romain (UCLA, NBER, and CEPR) |
| Abstract: | We explore the interrelationships between various measures of cultural distance. We first discuss measures of genetic distance, used in the recent economics literature to capture the degree of relatedness between countries. We next describe several classes of measures of linguistic, religious, and cultural distances. We introduce new measures of cultural distance based on differences in average answers to questions from the World Values Survey. Using a simple theoretical model we hypothesize that ancestral distance, measured by genetic distance, is positively correlated with linguistic, religious, and cultural distance. An empirical exploration of these correlations shows this to be the case. This empirical evidence is consistent with the view that genetic distance is a summary statistic for a wide array of cultural traits transmitted intergenerationally. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:234&r=gro |
| By: | Jaume Ventura; Hans-Joachim Voth |
| Abstract: | Why did the country that borrowed the most industrialize first? Earlier research has viewed the explosion of debt in 18th century Britain as either detrimental, or as neutral for economic growth. In this paper, we argue instead that Britain’s borrowing boom was beneficial. The massive issuance of liquidly traded bonds allowed the nobility to switch out of low-return investments such as agricultural improvements. This switch lowered factor demand by old sectors and increased profits in new, rising ones such as textiles and iron. Because external financing contributed little to the Industrial Revolution, this boost in profits in new industries accelerated structural change, making Britain more industrial more quickly. The absence of an effective transfer of financial resources from old to new sectors also helps to explain why the Industrial Revolution led to massive social change – because the rich nobility did not lend to or invest in the revolutionizing industries, it failed to capture the high returns to capital in these sectors, leading to relative economic decline. |
| Keywords: | crowding out, debt crises, Industrial Revolution, Ricardian equivalence, misallocation, financial repression, structural change, productivity. |
| JEL: | E22 E25 E62 H56 H60 N13 N23 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1483&r=gro |
| By: | Alexander Klein; Tim Leunig |
| Abstract: | Gibrat's Law states that the growth of towns and cities is independent of their initial size. We show that the Industrial Revolution was revolutionary enough to violate this law for 1761-1801, 1801-1891, and all decades within. Small places grew more slowly throughout this period. Larger towns, in contrast, typically grew faster, but only if they were in core Industrial Revolution Counties. In line with economic theory, towns grew disproportionately when agglomeration economies exceeded urban disamenities, allowing wage rises that induced workers to migrate to the town. This only occurred in places characterised by new, mechanised industries and mining. |
| Keywords: | Gibrat’s law; city-size distribution; industrial revolution |
| JEL: | N0 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:wpaper:62159&r=gro |
| By: | Ewout Frankema; Jeffrey Williamson; Pieter Woltjer |
| Abstract: | This is the first study to present a unified quantitative account of African commodity trade in the long 19th century from the zenith of the Atlantic slave trade (1790s) to the eve of World War II (1939). Drawing evidence from a new dataset on export and import prices, volumes, composition and net barter terms of trade for five African regions, we show that Sub-Saharan Africa experienced a terms of trade boom that was comparable to other parts of the ‘global periphery’ from the late 18th century up to the mid-1880s, with an exceptionally sharp price boom in the four decades before the Berlin conference (1845-1885). We argue that this commodity price boom changed the economic context in favor of a European scramble for Africa. We also show that the accelerated export growth after the establishment of colonial rule deepened Africa’s specialization in primary commodities, even though the terms of trade turned into a prolonged decline after 1885. |
| JEL: | F10 O40 O55 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21213&r=gro |
| By: | Paul Cahu (The World Bank - The World Bank); Falilou Fall (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS); Roland Pongou (University of Ottawa [Ottawa] - University of Ottawa) |
| Abstract: | We propose a simple model of a mating economy in both monogamous and polygynous cultures, and derive implications for how polygyny affects individual and aggregate fertility. We find that an attractive woman is more likely to find a high-status husband. However, when polygyny is allowed, high-status husbands naturally attract other women; this implies that female beauty increases the likelihood of entering into a polygynous relationship. A woman in a polygynous relationship produces fewer children than a woman in a monogamous relationship as long as the preference for reproduction relative to consumption is not too strong. However, the societal practice of polygyny increases aggregate fertility through two distinct channels: (1) by increasing the number of marriages; (2) by triggering fertility contagion: a woman, whether involved in a monogamous or polygynous relationship, produces more children as polygyny becomes more prevalent in her neighborhood. We empirically validate each of the model's key predictions. |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01130403&r=gro |
| By: | Daniela, Antonescu |
| Abstract: | The territory affects how economic systems work, geographic proximity being a primary source of economic and social benefits. Generally speaking, territorial development is minimal determined by exogenous factors, while the main factors that influence the potential of local development are: endowment, resources, human and social capital, accessibility, infrastructure etc. These factors can be found in the regional growth theory which, by its scientific nature, is assimilated with macroeconomic theory. New economic geography emphasizes the importance of these factors, which focus on the lower production costs. At the same time, technological change and diffusion of technologies are considered endogenous variables which react to the market signals. Positive externalities are produced by using technological investment, employment and income redistribution in society. Research development, entrepreneurial skills, local production, innovation, knowledge, learning networks etc. are considered to be the engine of economic growth. In this paper, there are presented the main theoretical approaches of endogenous growth, which have contributed to understanding the implications and the effects of this process upon regional development. |
| Keywords: | regional endogenous growth, new economic geography, endogenous factors |
| JEL: | A1 A11 A12 A2 A20 A23 R00 R1 R13 |
| Date: | 2015–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:64679&r=gro |
| By: | María Florencia Aráoz; Esteban A. Nicolini |
| Abstract: | The economic performance of Argentina in the long run is quite usually divided in two periods: in the first one (1870-1914) we observe openness, low levels of public intervention and rapid growth in relative terms, while in the second (1914-1970) we observe relative economic slowdown together with inward looking policies and higher levels of public intervention. While there are many reconstructions of the evolution of main macroeconomic variables at a national aggregate level since the second half of the nineteenth century and many descriptions of the sectorial dimensions of this process, the available information about its provincial or regional dimensions is very scarce. In this paper we present an estimation of the GDPs of the twenty four provinces in Argentina in 1914 which is the first consistent and comparable estimation of this variable for any period before the 1950s. Our results confirm the standard view that most of the economic activity at the end of the period of the first globalization is located in the central area of the country and, in particular, in the province and city of Buenos Aires which seems to have been a quite important pole of economic activity; however, we also show that some peripheral areas in Patagonia, with very low population density, are quite affluent in per capita terms suggesting that resource abundance was an important factor to explain levels of income per capita. The comparison of the relative incomes per capita of the provinces in 1914 with the available data for 1953 suggest a remarkable stability and indicates that in this period there were no signs of reversal of income but rather persistence or even divergence. |
| Keywords: | regional development , inequality , Argentina , convergence , reversal |
| JEL: | E01 R11 R12 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:cte:whrepe:wp15-05&r=gro |
| By: | D. Hartmann; M. Guevara; C. Jara-Figueroa; M. Aristar\'an; C. A. Hidalgo |
| Abstract: | The mix of products that a country exports predicts that country's subsequent pattern of diversification and economic growth. But does this product mix also predict income inequality? Here we combine methods from econometrics, network science, and economic complexity to show that countries that export complex products - products that are exported by a few diversified countries - have lower levels of income inequality - at comparable levels of GDP per capita and education - than countries exporting simpler products. Using multivariate analysis we show that the connection between income inequality and economic complexity is stronger than what can be explained using aggregate measures of income, institutions, export concentration, and human capital, and also, that increases in economic complexity are accompanied by decreases in income inequality over long periods of time. Finally, we use the position of a country in the network of related products - or product space - to explain how changes in a country's export structure translate into changes in income inequality. We interpret these results by combining the literature in institutions with that on economic complexity and structural transformations. We argue that the connection between income inequality and economic complexity is also evidence of the co-evolution between institutions and productive activities. |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1505.07907&r=gro |
| By: | Thanh Le (University of Queensland); Cuong Le Van (VCREME - VanXuan Center of Research in Economics, Management and Environment - VanXuan Center of Research in Economics, Management and Environment, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS, IPAG Business School) |
| Abstract: | Upon introducing natural resources, both renewable and non-renewable, into an endogenous growth framework with R&D, this paper derives the transitional dynamics of an economy towards its long-run equilibrium. Using the Euler - Lagrange framework, this paper has succesfully figured out the optimal paths of the economy. It then shows the existence and uniqueness of a balanced growth path for each type of resources. The steady state is shown to be of a saddle point stability. Along the balanced growth path, it is found that a finite size resource sector coexists with other continuously growing sectors. The paper then examines long-run responses of the economy to various changes pertaining to innovative production condition, resource sector parameters as well as rate of time preference. It also shows that positive long-run growth will be sustained regardless the type of resources used. |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01114589&r=gro |
| By: | Growiec, Jakub; McAdam, Peter; Muck, Jakub |
| Abstract: | Based on long US time series we document a range of empirical properties of the labor’s share of GDP, including its substantial medium-run swings. We explore the extent to which these empirical regularities can be explained by a calibrated micro-founded long-run economic growth model with normalized CES technology and endogenous labor- and capital-augmenting technical change driven by purposeful directed R&D investments. It is found that dynamic macroeconomic trade-offs created by arrivals of both types of new technologies may lead to prolonged swings in the labor share due to oscillatory convergence to the balanced growth path as well as stable limit cycles via Hopf bifurcations. Both predictions are broadly in line with the empirical evidence. JEL Classification: E25, E32, O33, O41 |
| Keywords: | CES, endogenous cycles, factor-augmenting endogenous technical change, labor income share, normalization, R&D, technology menu |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20151765&r=gro |
| By: | Luca Zamparelli (Sapienza, University of Rome) |
| Abstract: | This paper examines the evolution of wealth distribution between workers and capitalists. It shows that under competitive conditions, and when factors elasticity of substitution is high enough to ensure endogenous growth, capitalists' share of total wealth asymptotically tends to one if they have a higher propensity to save than workers. It is also shown that a tax on capital income shifts wealth distribution in workers' favor and makes any level of wealth concentration feasible. |
| Keywords: | Wealth distribution, elasticity of substitution, Pasinetti two-class equilibrium, Piketty |
| JEL: | E12 E13 E25 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:saq:wpaper:01/15&r=gro |