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on Financial Development and Growth |
| By: | Chu, Angus C.; Cozzi, Guido |
| Abstract: | How does patent policy affect long-run economic growth through the population growth rate? To analyze this question, we develop an R&D-based growth model with endogenous fertility. In recent vintages of R&D-based growth models in which scale effects are absent, the long-run growth rate depends on the population growth rate that is assumed to be exogenous. In this study, we develop a semi-endogenous-growth version of the quality-ladder model with endogenous fertility and human-capital accumulation to analyze an unexplored interaction between intellectual property rights, endogenous fertility and economic growth. We find that strengthening patent protection has a surprisingly negative effect on technological progress in the long run through endogenous fertility. Furthermore, a stronger cultural preference on fertility tends to magnify this negative effect of patent policy on long-run growth. |
| Keywords: | economic growth; endogenous fertility; patent policy |
| JEL: | O34 O31 O40 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29059&r=fdg |
| By: | Walter Leonel Muinelo Gallo (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Oriol Roca Sagalés (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona) |
| Abstract: | This paper analyses the impact of different instruments of fiscal policy on economic growth as well as on income inequality, using an unbalanced panel of 43 upper-middle and high income countries for the period 1972-2006. We consider and estimate two individual equations explaining growth and inequality in order to assess the incidence of different fiscal policies. Firstly, our approach considers imposing orthogonal assumptions between growth and inequality in both equations, and secondly, it allows growth to be included in the inequality equation, and inequality to be included in the growth equation. The empirical results suggest that an increase in the size of government measured through current expenditures and direct taxes diminishes economic growth while reducing inequality, being public investment the only fiscal policy that may break this trade-off between efficiency and equity, since increases in this item reduces inequality without harming output. Therefore, the results reflect that the trade-off between efficiency and equity that governments often confront when designing their fiscal policies may be avoided. |
| Keywords: | fiscal policy, inequality, growth, panel data models |
| JEL: | E62 D31 O47 C23 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:uab:wprdea:wpdea1105&r=fdg |
| By: | Ghada Fayad |
| Abstract: | The literature on remittances and growth has thus far established a positive link between remittances and overall economic growth in recipient countries using standard growth regressions.In this paper, we identify the main transmission channel through which remittance transfers seem to exert their growth-enhancing effects: the 'export-led growth' channel. We do so by using a methodology that exploits both cross-country and within-country cross-industry variation in data averaged over the 1980s and the 1990s decades and correcting for the endogeneity of remittances by reverting to a set of external instruments, most of which we construct for this purpose. For both decades, we find that remittances are conducive to the relative growth of exporting industries within the manufacturing sector in a large set of remittance recipient countries. We also identify an alternative channel through which remittances affect growth: the financial development channel, where remittances are found to favor growth in industries that are less in need of external financing. In this paper, we give special attention to the potential migrant network complementarity effect with international trade and show in a number of ways that such background e¤ect is not driving our results. Instead, our findings strongly suggest an investment channel through which remittances as financial transfers are, either directly as capital investment transfers or indirectly through their economy-wide investment-enhancing effects,boosting export sector growth in recipient economies. |
| Keywords: | Remittances, manufacturing, export-led growth, Dutch disease, migrant networks |
| JEL: | F2 F4 O1 Q3 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:oxcrwp:057&r=fdg |
| By: | Martin Larch; Paul van den Noord; Lars Jonung |
| Abstract: | While current instruments of EU economic policy coordination helped stave off a full-scale depression, the post-2007 global financial and economic crisis has revealed a number of weaknesses in the Stability and Growth Pact, the EU framework for fiscal surveillance and fiscal policy coordination. This paper provides a diagnosis of how the SGP faired ahead and during the present crisis and offers a first comprehensive review of the ongoing academic and policy debate, including an account of the reform proposals adopted by the Commission on 29 September 2010. In our view, the current system of EU rules is unbalanced. It consists of (i) very specific provisions on how to conduct fiscal policy making in normal times with no effective enforcement mechanisms, and of (ii) no or extremely tight provisions for really bad economic times, like the Great Recession. A two-pronged approach as outlined in this report is needed to revive the Pact: tighter enforcement, coupled with broader macroeconomic surveillance, in good times and an open window for exceptionally bad times, including a crisis resolution mechanism at the EU level. |
| JEL: | E62 E63 H6 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:euf:ecopap:0429&r=fdg |
| By: | Claire Loupias (EPEE, TEPP - Université d'Evry-Val-d'Essonne et CEPII); Bertrand Wigniolle (Centre d'Economie de la Sorbonne - Paris School of Economics) |
| Abstract: | This paper suggests a new explanation for changes in economic and population growth with a long run perspective, emphasizing the role of land in the development process. Starting from a pre-industrialization state called the "Malthusian regime&qot;, land and labor are the main production factors. The size of population is limited by the quantity of land available for households and by incomes. Technical progress driven by a "Boserupian effect" may push the economy towards a take-off regime. In this regime, capital accumulation begins and a "learning-by-doing" effect in production takes over from the "Boserupian effect". If this effect is strong enough, the economy can reach an "ultimate growth regime". In the different phases, land plays a crucial role. |
| Keywords: | Endogenous fertility, land, endogenous growth. |
| JEL: | D9 J13 O12 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:11010&r=fdg |