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on Financial Development and Growth |
| By: | Paradiso, Antonio; Kumar, Saten; Rao, B. Bhaskara |
| Abstract: | The growth effects of human capital, measured in various ways, are controversial and inconclusive. In this paper we estimate the growth effect of human capital with country specific time series data for Australia. In doing so, we extended the Solow (1956) growth model by using educational attainment as a measure of human capital developed by Barro and Lee (2010). The extended Solow (1956) model performs well after allowing for the presence of structural changes. Our results, based on alternative time series methods, show that educational attainment has a small and significant permanent effect on the growth rate of per worker output in Australia. For comparison of results, alternative measures of human capital are also utilized. |
| Keywords: | SSGR; Economic Growth; Education; Australia |
| JEL: | O56 C22 O40 |
| Date: | 2011–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34791&r=fdg |
| By: | Ladislava Grochová (Department of Economics, FBE MENDELU in Brno); Luděk Kouba (Department of Economics, FBE MENDELU in Brno) |
| Abstract: | The growth theory of new political economy distinguishes two types of political instability – elite (violent coups, riots) and non-elite (non-violent government breakdowns). The purpose of the paper is to show that elite political stability is not a necessary condition for economic growth, i.e. we cast a doubt on a generality of growth theory when considering not exact term of political stability. Our hypothesis is tested on panel data from the Baltic states where a number of government changes has taken place and still fast economic growth can be seen over the last two decades. A dynamic ordinary least square (DOLS) model is used to estimate production function augmented with an elite political instability variable. Since it is shown that elite political instability has a negligible impact on economic growth, we consider the hypothesis regarding the necessity of political stability for economic development to be only a specific non-generalizable case, emphasizing the necessity of distinguishing elite and non-elite political instability. |
| Keywords: | new political economy, political instability, elite political instability, production function, single equation, Baltic states |
| JEL: | B59 C20 O52 P26 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:men:wpaper:15_2011&r=fdg |
| By: | Gert-Jan Linders; Tatyana Bulavskaya; Henri De Groot; Ferdinand Paraguas |
| Abstract: | Discussion on the possibilities for and barriers to income convergence and catch-up growth is at the heart of the debate on European regional economic policy. This study presents an empirical analysis of the determinants of regional productivity growth in Europe, using the most recent Cambridge Econometrics regional database, EU KLEMS growth and productivity accounts and EuroStat R&D data. We apply a reduced-form empirical specification for semi-endogenous productivity growth that allows for differences in steady state income levels and long-run growth rates. Productivity growth in a region depends on its level of human capital, the investments in R&D, and the productivity gap with the technology frontier. Empirical findings show that these factors are interrelated. Apart from a technology gap, absorptive capacity is important to realize catch-up. Both convergence and divergence of productivity across regions are possible. Results show that all considered factors have significant effect on disparity in regional productivity growth, although effects across manufacturing and service sectors are different. The estimated model also features stable dynamic properties in response to an exogenous shock. Keywords: Semi-endogenous Growth, Regional Convergence, International Transfer of Technology, human capital, R&D. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa11p64&r=fdg |
| By: | Andrew Swiston; Luis-Diego Barrot |
| Abstract: | Central America experienced moderate growth during the last decade, including in the years leading up to the global financial crisis, but the rate of convergence toward advanced country income levels has still been slow. Moreover, forecasts imply that these trends will continue. What can be done to spur higher growth in Central America? We bring new data to bear on this question-version 7.0 of the Penn World Table and a new IMF database on structural reforms. Our cross-country panel regression of economic growth using System GMM captures the importance to growth of conditional convergence, factor accumulation, and macro policies. In addition, structural efficiency is a significant factor in explaining growth performance. We construct a broad index of efficiency and find that increasing the degree of structural efficiency by one standard deviation raises growth by ½ percent. This implies that Central American countries could significantly increase their long-run growth rates by increasing the flexibility of markets and improving the quality of regulation. |
| Keywords: | Central America , Cross country analysis , Economic growth , Economic models , Fiscal reforms , |
| Date: | 2011–10–26 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:11/248&r=fdg |
| By: | Selim Elekdag; Yiqun Wu |
| Abstract: | Episodes of rapid credit growth, especially credit booms, tend to end abruptly, typically in the form of financial crises. This paper presents the findings of a comprehensive event study focusing on 99 credit booms. Loose monetary policy stances seem to have contributed to the build-up of credit booms across both advanced and emerging economies. In particular, domestic policy rates were below trend during the pre-peak phase of credit booms and likely fuelled macroeconomic and financial imbalances. For emerging economies, while credit booms are associated with episodes of large capital inflows, international interest rates (a proxy for global liquidity) are virtually flat during these periods. Therefore, although external factors such as global liquidity conditions matter, and possibly increasingly so over time, domestic factors (especially monetary policy) also appear to be important drivers of real credit growth across emerging economies. |
| Keywords: | Asia , Credit expansion , Monetary policy , Liquidity , Capital inflows , Financial crisis , Interest rates , Bank soundness , Corporate sector , International liquidity , |
| Date: | 2011–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:11/241&r=fdg |
| By: | Paula Faria (Faculdade de Economia, Universidade do Porto); Francisco Vitorino da Silva Martins (Faculdade de Economia, Universidade do Porto); Elísio Fernando Moreira Brandão (Faculdade de Economia, Universidade do Porto) |
| Abstract: | Setting targets to increase the levels of R&D, a component that is present in the political and economic agendas of the European Member States with the promotion of active tax policies, suggests that it is possible for R&D to cause an impact on economic growth. This research work aims at understanding the influence of the evolution of R&D expenditures, as well as the influence of tax incentives on economic growth. For that, a panel data of 15 European countries, during the period between 1995 and 2008, was used. The econometric study confirms the foreseen importance, both in this study and in the literature, of the countries’ R&D efforts and their impact on economic growth. The positive effect of tax incentives on economic growth, combined with R&D levels, is highlighted and demonstrated, thus confirming a strategic orientation towards tax policies followed by the national institutions. |
| Keywords: | R&D, tax incentives, economic growth, econometric analysis in panel data |
| JEL: | C23 H20 H3 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:442&r=fdg |