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on Economic Growth |
| By: | Alesina, Alberto (Harvard University); Giuliano, Paola (University of California, Los Angeles) |
| Abstract: | A growing body of empirical work measuring different types of cultural traits has shown that culture matters for a variety of economic outcomes. This paper focuses on one specific aspect of the relevance of culture: its relationship to institutions. We review work with a theoretical, empirical, and historical bent to assess the presence of a two-way causal effect between culture and institutions. |
| Keywords: | culture, institutions |
| JEL: | P16 Z1 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9246&r=all |
| By: | Andrey Shcherbak (National Research University Higher School of Economics) |
| Abstract: | Considering diet as often a product of adaptation to geographic environment, this paper suggests that not only amount of food (food abundance) is important, but what kind of foods people eat may also affect social change. One of the reasons for variation in diet is food intolerances as a result of adaptation to the environment. This paper investigates one case – lactase persistence. This trait is associated with different genotypes of LCT gene. Lactase persistence is mostly spread among northern Europeans, and is also found among some African and Asian nomadic populations. Such unique trait is usually explained in the gene-culture coevolution framework: selective pressure for it had to be followed by expansion of dairying and herding. Empirical analysis based on 78 populations reveals strong and positive association between share of lactase persistent population and distribution of emancipative values. The suggested causal mechanism is change in demographic trends: the effect of lactase persistence on the emancipative values is mediated through historically lower fertility and lower child mortality rates. Demographic transition results in higher value of human life, formation of human capital, economic development and finally cultural change. |
| Keywords: | lactase, genes, value change |
| JEL: | I15 Q57 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:64/soc/2015&r=all |
| By: | Lundborg, Petter (Department of Economics, Lund University); Majlesi, Kaveh (Department of Economics, Lund University) |
| Abstract: | Studies on the intergenerational transmission of human capital usually assume a one-way spillover from parents to children. But what if children also affect their parents’ human capital? Using exogenous variation in education, arising from a Swedish compulsory schooling reform in the 1950s and 1960s, we address this question by studying the causal effect of children’s schooling on their parents’ longevity. We first replicate previous findings of a positive and significant cross-sectional relationship between children’s education and their parents’ longevity. Our causal estimates tell a different story; children’s schooling has no significant effect on parents’ survival. These results hold when we examine separate causes of death and when we restrict the sample to low-income and low-educated parents. |
| Keywords: | Intergenerational transmission; Human capital; Longevity; Compulsory schooling; Education |
| JEL: | I10 I21 J14 |
| Date: | 2015–08–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2015_022&r=all |
| By: | Silberberger, Magdalena |
| Abstract: | The role of regulatory quality as one of the so-called deep determinants of growth has emerged as an important issue in economic research in the past 20 years. The positive or negative growth effects of a country´s regulatory framework are amplified by economic integration, which makes factors and producers more mobile and enables them to avoid burdensome regulation. Therefore, the two potential determinants to growth might be interlinked. So far there is very little empirical evidence on the impact of the regulatory framework in an integrated economy on growth. We deal with the most common problems in estimating growth equations by using internal instruments to identify a causal relationship between regulation and growth in the presence of international trade and find evidence that both regulation and trade have a significant positive influence on growth, with the effect of regulation being especially pronounced for countries that have worse regulatory quality and for middle-income countries. |
| Keywords: | institution,integration,regulation,openness,trade,growth |
| JEL: | F11 F43 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:255&r=all |
| By: | Alexander Chudik, Kamiar Mohaddes, M. Hashem Pesaran, and Mehdi Raissi |
| Abstract: | This paper studies the long-run impact of public debt expansion on economic growth and investigates whether the debt-growth relation varies with the level of indebtedness. Our contribution is both theoretical and empirical. On the theoretical side, we develop tests for threshold effects in the context of dynamic heterogeneous panel data models with cross-sectionally dependent errors and illustrate, by means of Monte Carlo experiments, that they perform well in small samples. On the empirical side, using data on a sample of 40 countries (grouped into advanced and developing) over the 1965-2010 period, we and no evidence for a universally applicable threshold effect in the relationship between public debt and economic growth, once we account for the impact of global factors and their spillover effects. Regardless of the threshold, however, we find significant negative long-run effects of public debt build-up on output growth. Provided that public debt is on a downward trajectory, a country with a high level of debt can grow just as fast as its peers. |
| Keywords: | Panel tests of threshold effects, long-run relationships, estimation and inference, large dynamic heterogeneous panels, cross-section dependence, debt, and inflation. |
| JEL: | C23 E62 F34 H6 |
| Date: | 2015–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1520&r=all |
| By: | Raouf Boucekkine (Aix-Marseille University (Aix-Marseille School of Economics), CNRS and EHESS); Patrick Pintus (Aix-Marseille Université (Aix-Marseille School of Economics), CNRS & EHESS); Benteng Zou |
| Abstract: | We examine the issue of stability of stochastic endogenous growth. First, stochastic stability concepts are introduced and applied to stochastic linear homogenous differential equations to which several stochastic endogenous growth models reduce. Second, we apply the mathematical theory to two models, starting with the stochastic AK model. It's shown that in this case exponential balanced paths, which characterize optimal trajectories in the absence of uncertainty, are not robust to uncertainty: the economy may almost surely collapse at exponential speed even though productivity is initially arbitrarily high. Finally, we revisit the seminal global diversification endogenous growth model (Obstfeld, 1994): taking into account stochastic stability calls for a redefinition of the mean growth concept, which leads to revisit the established wisdom on the growth effect of global diversification. |
| Keywords: | endogenous growth, stochastic growth, stochastic stability, AK model, global diversification |
| JEL: | O40 C61 C62 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:1532&r=all |
| By: | Chudik, Alexander (Federal Reserve Bank of Dallas); Mohaddes, Kamiar (University of Cambridge); Pesaran, M. Hashem (University of Southern California); Raissi, Mehdi (International Monetary Fund) |
| Abstract: | This paper studies the long-run impact of public debt expansion on economic growth and investigates whether the debt-growth relation varies with the level of indebtedness. Our contribution is both theoretical and empirical. On the theoretical side, we develop tests for threshold effects in the context of dynamic heterogeneous panel data models with crosssectionally dependent errors and illustrate, by means of Monte Carlo experiments, that they perform well in small samples. On the empirical side, using data on a sample of 40 countries (grouped into advanced and developing) over the 1965-2010 period, we find no evidence for a universally applicable threshold effect in the relationship between public debt and economic growth, once we account for the impact of global factors and their spillover effects. Regardless of the threshold, however, we find significant negative long-run effects of public debt build-up on output growth. Provided that public debt is on a downward trajectory, a country with a high level of debt can grow just as fast as its peers. |
| JEL: | C23 E62 F34 H6 |
| Date: | 2015–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddgw:245&r=all |
| By: | Mario Amendola (Dipartimento di Scienze Sociali ed Economiche - Università degli Studi di Roma "La Sapienza" [Rome]); Jean-Luc Gaffard (OFCE - OFCE - Sciences Po) |
| Abstract: | Novelty and hysteresis are the main engines of economic evolution. However, they are also at the origin of co-ordination issues, as the consequences of any innovative choice can never be fully expected. Thus, there is no sense in analysing economic change as an intertemporal equilibrium with rational expectations. Not only growth and fluctuations cannot be dissociated, but there is no long-term trend that would be independent from what happens in the short- term. The explicit consideration of essential evolutionary phenomena like novelty and hysteresis help a clearer understanding of some important episodes of contemporaneous economic history. The periods considered are characterized by crises and structural changes, and it is exactly when important disturbances affect the functioning of the economies that the relevant features of their behaviour come to the surface and hence the right interpretations of the phenomena taking place, with the adequate policy implications, can be formulated. |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01027426&r=all |
| By: | Giorgio Fabbri (EPEE - Université d'Evry-Val d'Essonne) |
| Abstract: | We introduce an AK spatial growth model with a general geographical structure. The dynamics of the economy is described by a partial differential equation on a Riemannian manifold. The morphology interacts with the spatial dynamics of the capital and is one determinant of the qualitative behavior of the economy. We characterize the conditions on the geographical structure that guarantee convergence of the detrended capital across locations in the long run, and those inducing spatial capital agglomeration. |
| Date: | 2015–05–27 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01159253&r=all |
| By: | Bloom, David E.; Kuhn, Michael; Prettner, Klaus |
| Abstract: | We analyze the economic consequences for less developed countries of investing in female health. In so doing we introduce a novel micro-founded dynamic general equilibrium framework in which parents trade off the number of children against investments in their education and in which we allow for health-related gender differences in productivity. We show that better female health speeds up the demographic transition and thereby the take-off toward sustained economic growth. By contrast, male health improvements delay the transition and the take-off because ceteris paribus they raise fertility. According to our results, investing in female health is therefore an important lever for development policies. However, and without having to assume anti-female bias, we also show that households prefer male health improvements over female health improvements because they imply a larger static utility gain. This highlights the existence of a dynamic trade-off between the short-run interests of households and long-run development goals. Our numerical analysis shows that even small changes in female health can have a strong impact on the transition process to a higher income level in the long run. Our results are robust with regard to a number of extensions, most notably endogenous investment in health care. |
| Keywords: | economic development,educational transition,female health,fertility transition,quality-quantity trade-off |
| JEL: | O11 I15 I25 J13 J16 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuweco:022015&r=all |
| By: | Amany El-Anshasy, Kamiar Mohaddes, and Jeffrey B. Nugent |
| Abstract: | This paper examines the long-run effects of oil revenue and its volatility on economic growth as well as the role of institutions in this relationship. We collect annual and monthly data on a sample of 17 major oil producers over the period 1961. 2013, and use the standard panel autoregressive distributed lag (ARDL) approach as well as its cross-sectionally augmented version (CS-ARDL) for estimation. Therefore, in contrast to the earlier literature on the resource curse, we take into account all three key features of the panel: dynamics, heterogeneity and cross-sectional dependence. Our results suggest that (i) there is a significant negative effect of oil revenue volatility on output growth, (ii) higher growth rate of oil revenue significantly raises economic growth, and (iii) better fiscal policy (institutions) can offset some of the negative effects of oil revenue volatility. We therefore argue that volatility in oil revenues combined with poor governmental responses to this volatility drives the resource curse paradox, not the abundance of oil revenues as such. |
| Keywords: | Economic growth, natural resource curse, institutions, oil price volatility, oil income, macroeconomic policy |
| JEL: | C23 E02 F43 O13 Q32 |
| Date: | 2015–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1523&r=all |