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on Financial Development and Growth |
| By: | Minh Son Le; Duc Tho Nguyen; Tarlok Singh |
| Keywords: | Growth elasticity of poverty, economic growth, pro-poor growth, poverty, province, Vietnam. |
| JEL: | O10 O40 I30 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:gri:epaper:economics:201401&r=fdg |
| By: | Theodore R. Breton |
| Abstract: | In 1960 Theodore Schultz expounded a human capital theory of economic growth that includes three elements: 1) Countries without much human capital cannot manage physical capital effectively, 2) Economic growth can only proceed if physical capital and human capital rise together, and 3) Human capital is the factor most likely to limit growth. I specify Schultz’s theory mathematically and test it in periods when global financial capital was highly mobile. I find that in 1870, 1910, and 2000, the average schooling attainment of the adult population largely determined the stock of physical capital/capita and GDP/capita in 42 market economies. |
| Keywords: | Human Capital, Schooling, Capital Investment, Economic Growth, Solow Model, Market Economies |
| JEL: | E13 I21 O11 O15 O41 |
| Date: | 2014–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:col:000122:011834&r=fdg |
| By: | Hayat, Arshad |
| Abstract: | In the paper, I explored links between inflow of FDI, natural resource abundance and economic growth. Natural resource abundance is considered to slow down the economic growth. The paper explores if the natural resource abundance reduce the FDI induced growth in the host country. Using panel data for a sample of 106 countries for the period 1993-2012, the paper conclude FDI inflow accelerates economic growth of the host country. However, the presence of natural resources slows down the FDI induced growth. |
| Keywords: | Foreign Direct Investment, Economic Growth, Natural Resources, Resource Curse, Hausman Test |
| JEL: | F23 F43 O4 Q0 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57021&r=fdg |
| By: | Theodore R. Breton |
| Abstract: | I use a dynamic augmented Solow model to estimate the effects of students’ test scores and investment in schooling on economic growth rates in 49 countries during 1985-2005. In the complete data set, either average test scores or investment in schooling explain economic growth rates, and more of either causes growth. Further analysis reveals that higher test scores only raised growth rates in countries with low average levels of schooling. In countries with more than 7.5 years of schooling attainment in 1985, more investment in schooling raised growth rates, but higher average test scores did not. |
| Keywords: | Education Expenditures; Human Capital; Test Scores; Economic Growth |
| JEL: | O41 I25 |
| Date: | 2013–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:col:000122:011832&r=fdg |
| By: | Cristina Jude (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR7322 - Université d'Orléans, Facultatea de Litere - Faculté des lettres - Universitatea Babeş-Bolyai, Cluj-Napoca); Grégory Levieuge (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR7322 - Université d'Orléans) |
| Abstract: | This paper investigates the effect of FDI on economic growth conditional on the institutional quality of host countries. We consider institutional heterogeneity to be an explanation for the mixed results of previous empirical studies and we develop several arguments to show that institutional quality modulates the intensity of FDI impact on growth. Using a comprehensive data set for institutional quality, we test this hypothesis on a sample of 94 developing countries over the period 1984-2009. The use of Panel Smooth Transition Regression (PSTR) allows us to identify both the heterogeneity and the threshold of institutional quality that influence the FDI growth effect. These results have significant implications for policy sequencing in developing countries. In order to benefit from FDI-led growth, the improvement of the institutional framework should precede FDI attraction policies. While some features of institutional quality have an immediate effect on fostering FDI-led growth, others need a consistent accumulation of efforts, therefore challenging the effectiveness of institutional reforms in developing countries. |
| Keywords: | FDI ; growth ; heterogeneity ; institutional quality ; PSTR ; Developing economies |
| Date: | 2014–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01014404&r=fdg |
| By: | David Rosnick; Mark Weisbrot |
| Abstract: | Latin America's economic growth rebound in the 2000s is often attributed to a “commodities boom,” which implies that the region’s growth was stimulated by sizable increases in the price of commodity exports. This paper looks at whether the data support such a conclusion. It finds that there is no statistically significant relationship between the increase in the terms of trade (TOT) for Latin American countries and their GDP growth. There is, however, a positive relationship between the TOT increase and an improvement in the current account balance. It may be that this allowed countries to avoid balance of payments crises or constraints. |
| Keywords: | latin america, terms of trade, commodities boom |
| JEL: | E E0 F F1 F13 F17 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2014-09&r=fdg |
| By: | Darvas, Zsolt |
| Abstract: | Data from 135 countries covering five decades suggests that creditless recoveries, in which the stock of real credit does not return to the pre-crisis level for three years after the GDP trough, are not rare and are characterised by remarkable real GDP growth rates: 4.7 percent per year in middle-income countries and 3.2 percent per year in high-income countries. However, the implications of these historical episodes for the current European situation are limited, for two main reasons. First, creditless recoveries are much less common in high-income countries, than in low-income countries which are financially undeveloped. European economies heavily depend on bank loans and research suggests that loan supply played a major role in the recent weak credit performance of Europe. There are reasons to believe that, despite various efforts, normal lending has not yet been restored. Limited loan supply could be disruptive for the European economic recovery and there has been only a minor substitution of bank loans with debt securities. Second, creditless recoveries were associated with significant real exchange rate depreciation, which has hardly occurred so far in most of Europe. This stylised fact suggests that it might be difficult to re-establish economic growth in the absence of sizeable real exchange rate depreciation, if credit growth does not return. |
| Keywords: | creditless recovery, credit growth financial structure, real exchange rate adjustment |
| JEL: | E32 E44 E51 F31 G21 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:cvh:coecwp:1605&r=fdg |
| By: | James Cloyne (Bank of England; Centre for Macroeconomics (CFM)) |
| Abstract: | The size and sign of the government spending multiplier crucially depends on how the spending is financed and how consumers respond to implied future tax increases. I investigate this issue in an estimated New Keynesian DSGE model with distortionary labor and capital taxes and, importantly, with preferences that allow the wealth effect on labor supply to vary. Specifically I assess whether the model can explain the empirical evidence for the United States and examine the transmission mechanism, for realistic policy rules. I show that the model can match the positive empirical response of key variables including output, consumption and the real wage. I find that the role of the wealth effect on labor supply is small and that while tax rates rise following a spending shock these increases are modest, with debt rising. Deficit financed spending increases are therefore expansionary, but this is due to sticky prices rather than the wealth effect channel. |
| Keywords: | Fiscal policy, government spending shocks, spending multiplier, business cycles |
| JEL: | E20 E32 E62 H20 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:cfm:wpaper:1413&r=fdg |