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on Financial Development and Growth |
| By: | Laurent Cavenaile; Christian Gengenbach; Franz Palm |
| Abstract: | The aim of this paper is to investigate the long run relationship between the development of banks and stock markets and economic growth. We make use of the Groen and Kleibergen (2003) panel cointegration methodology to test the number of cointegrating vectors among these three variables for 5 developing countries. In addition, we test the direction of potential causality between financial and economic development. Our results conclude to the existence of a single cointegrating vector between financial development and growth and of causality going from financial development to economic growth. We find little evidence of reverse causation as well as bi-directional causality. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:rpp:wpaper:1102&r=fdg |
| By: | Araujo, Ricardo Azevedo; Lima, Gilberto Tadeu |
| Abstract: | This paper contributes to the literature on economic growth by seeking to join several lines of research on structural factors in a more fully specified framework, on the one hand, and by making this more inclusive supply side to interact with demand factors in a model of export-led growth, on the other hand. Balance-of-payments constraints influence the adoption of investment-specific technological change which requires the import of capital goods, while the sectoral allocation of physical and human capital is likewise revealed to be crucial for economic growth, both results having important policy implications. |
| Keywords: | embodied technological change; sectoral allocation of investment; human capital accumulation; export-led growth |
| JEL: | O11 O41 O33 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29810&r=fdg |
| By: | MIYAZAWA Kensuke |
| Abstract: | This paper measures human capital development in the Japanese workforce after WWII. An increase in workers' years of schooling is believed to have aided Japan's economic growth after WWII. The development of human capital has acquired increasing importance for Japan's future economic growth given its aging population. To quantify these historical and forward-looking contributions of human capital, we construct a dataset that incorporates the distribution of workers' years of schooling by employing data covering workers and students. We transform years of schooling into a measure of human capital by using a nonlinear Mincer-type wage function. We find that workers' average years of schooling increased dramatically during the 1950s and 1960s. While this increase in human capital could explain much of Japan's economic growth during these decades, education policies have limited prospects for contributing to Japan's future economic growth. |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:11037&r=fdg |
| By: | Néstor Duch-Brown (University of Barcelona & IEB); Javier García-Estévez (University of Barcelona & IEB); Martí Parellada-Sabata (University of Barcelona & IEB) |
| Abstract: | This paper examines the main contributions of universities to the economic growth of Spanish regions. It calculates the separate effects of the different university functions on the regional economy, namely the creation of human capital, research and technology transfer. It includes a panel data set with the key variables of university activities and their effects on the economy at provincial level. The econometric estimations are based on information for all 47 public universities and include 34 Spanish provinces. The empirical results suggest that the growth of regional GVA is positively correlated to both the human capital created by universities and the stock of university patents |
| Keywords: | regional economic development, universities, higher education, human capital, research, technology development |
| JEL: | R15 I23 O18 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2011/4/doc2011-6&r=fdg |
| By: | Andrew T. Young (College of Business and Economics, West Virginia University); Matthew J. Higgins (College of Management, Georgia Institute of Technology); Daniel Levy (Department of Economics, Bar-Ilan University; Department of Economics, Emory University; RCEA) |
| Abstract: | We use U.S. county-level data containing 3,058 cross-sectional observations and 41 conditioning variables to study economic growth and explore possible heterogeneity in growth determination across 32 individual states. Using a 3SLS-IV estimation method, we find that all statistically significant convergence rates (for 32 individual states) are above 2 percent, with an average of 8.1 percent. For 7 states the convergence rate can be rejected as identical to at least one other state’s convergence rate with 95 percent confidence. Convergence rates are negatively correlated with initial income. The size of government at all levels of decentralization is either unproductive or negatively correlated with growth. Educational attainment has a non-linear relationship with growth. The size of the finance, insurance and real estate, and entertainment industries are positively correlated with growth, while the size of the education industry is negatively correlated with growth. Heterogeneity in the effects of balanced growth path determinants across individual states is harder to detect than in convergence rates. |
| Keywords: | Economic Growth, Conditional Convergence, County Level Data |
| JEL: | O40 O11 O18 O51 R11 H50 H70 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:18_11&r=fdg |
| By: | António Afonso; Jaromír Baxa; Michal Slavík |
| Abstract: | We use a threshold VAR analysis to study whether the effects of fiscal policy on economic activity differ depending on financial market conditions. In particular, we investigate the possibility of a non-linear propagation of fiscal developments according to different financial market stress regimes. More specifically we employ a quarterly dataset, for the U.S., the U.K., Germany and Italy, for the period 1980:4-2009:4, encompassing macro, fiscal and financial variables. The results show that (i) the use of a nonlinear framework with regime switches is corroborated by nonlinearity tests; (ii) the responses of economic growth to a fiscal shock are mostly positive in both financial stress regimes; (iii) financial stress has a negative effect on output growth and worsens the fiscal position; (iv) the nonlinearity in the response of output growth to a fiscal shock is mainly associated with different behaviour across regimes; (v) the size of the fiscal multipliers is higher than average in the last crisis. |
| Keywords: | fiscal policy, financial markets, threshold VAR. |
| JEL: | E62 G15 H60 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp112011&r=fdg |
| By: | Marina Azzimonti (Federal Reserve Bank of Philadelphia); Eva de Francisco (Department of Economics, Towson University); Vincenzo Quadrini (Department of Economics, University of Southern California) |
| Abstract: | During the last three decades the stock of government debt has increased in most developed countries. During the same period inter- national capital markets have been liberalized. In this paper we de- velop a two-country political economy model with incomplete markets and endogenous government borrowing and show that countries choose higher levels of public debt when nancial markets are internationally integrated. |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:tow:wpaper:2011-03&r=fdg |