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on Financial Development and Growth |
| By: | Jones, Yakama Manty |
| Abstract: | This paper assesses the foreign aid-led growth hypothesis in a panel of West African countries using panel cointegration techniques ( Pendroni Residual Cointegration Test, Error Correction Model, Johansen Fisher Panel Cointegration Test) and then on a country-by-country basis using time series cointegration techniques (Engle-Granger test, Error Correction Model , Johansen system cointegration test). The panel cointegration results indicate a long run relationship between aid and growth in the whole panel. For the individual countries, at least one test showed evidence of this long run relationship. Granger causality tests were done for the whole panel and then for each country individually to establish direction of causality between foreign aid and economic growth. There is evidence of unidirectional causality from foreign aid to economic growth, from economic growth to foreign aid and there are cases where both variables are independent. A simplified variation of the Chenery and Strout Two-Gap Model was estimated to test the impact of foreign aid and selected explanatory variables on economic growth in countries where aid was found to granger cause growth and this impact varied from country to country. |
| Keywords: | Foreign Aid, Growth, Error Correction Model, Johansen Panel Cointegration Test, Engle-Granger test, Granger causality |
| JEL: | E6 O1 O19 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:50361&r=fdg |
| By: | Raouf Boucekkine (Aix-Marseille University (Aix-Marseille School of Economics), CNRS and EHESS); Giorgio Fabbri (EPEE, Université d’Evry-Val-d’Essonne (TEPP, FR-CNRS 3126)); Patrick Pintus (Aix-Marseille University (Aix-Marseille School of Economics), CNRS and EHESS) |
| Abstract: | We consider a small-open, collateral-constrained AK economy. We show that the combination of CARA preferences and uncertainty on capital inflows in such an economy generates long-term (expected) growth while the deterministic counterpart does not. In this framework, long-term growth is entirely driven by precautionary savings. In particular, we show that the asymptotic growth rate of the expected capital stock is an increasing function of both the risk parameter and the Arrow-Prat absolute risk aversion parameter. The model also predicts that economies that are more financially integrated through international borrowing experience lower consumption growth volatility relative to output growth volatility. |
| Keywords: | Financial liberalization, growth, CARA preferences, collateral constraints, precautionary savings |
| JEL: | F34 F43 O40 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:eve:wpaper:13-11&r=fdg |
| By: | Angus C.Chu (University of Liverpool United Kingdom); Yuichi Furukawa (Chukyo University Japan); Lei Ji (Shanghai University of finance and economics China) |
| Abstract: | This study explores the different implications of patent breadth and RD subsidies on economic growth and endogenous market structure in a Schumpeterian growth model. We fend that when the number of firms is fixed in the short run, patent breadth and R&D subsidies serve to increase economic growth as in previous studies. However, when the number of firms adjusts endogenously in the long run, RD subsidies increase economic growth but decrease the number of firms,whereas patent breadth expands the number of firms but reduces economic growth. Therefore, RD subsidy is perhaps a more suitable policy instrument than patent breadth for the purpose of stimulating long-run economic growth. |
| Keywords: | economic growth,endogenous market structure, patents rd subsidies |
| JEL: | O30 O40 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1319&r=fdg |
| By: | Chienyu Huang (Southwestern University of Finance and economics); Juin Jen Chang (Institute of economics, Academia Sinica Taiwan); Lei Ji (Ofce sciences-po,skema Business School) |
| Abstract: | In this paper we explore the effects of monetary policy on the number of firms, firm market size, inflation and growth in a Schumpeterian growth model with endogenous market structure and cash-in-advance CIA constraints on two distinct types of RD investment in-house RD and entry investment. This allows us to match the empirical evidence and provides novel implications to the literature. We show that if in-house RD (quality improvement-type R&D) is subject to the CIA constraint, raising the nominal interest rate increases the number of firms and inflation, but decreases the firm size and economic growth. By contrast, if entry investment variety expansion-type RD is subject to the CIA constraint, these variables adversely respond to such a monetary policy. Besides, our model generates rich transitional dynamics in response to a change in monetary policy, when RD entry is restricted by a cash constraint. |
| Keywords: | CIA constraints on RD, endogenous market structure,monetary policy,economic growth |
| JEL: | O30 O40 E41 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1316&r=fdg |
| By: | Stadler, Manfred |
| Abstract: | We develop a dynamic stochastic general-equilibrium model of science, education and innovation to explain the simultaneous emergence of innovation clusters and stochastic growth cycles. Firms devote human-capital resources to research activities in order to invent higher quality products. The technological requirements in climbing up the quality ladders increase over time but this hampering effect is compensated for by an improving qualification of researchers allowing for a sustainable process of innovation and scale-invariant growth. Jumps in human capital, triggered by scientific breakthroughs, induce innovation clusters across industries and generate long-run growth cycles. -- |
| Keywords: | Science,Education,Innovation clusters,Stochastic growth cycles |
| JEL: | C61 E32 O33 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuewef:60&r=fdg |