nep-fdg New Economics Papers
on Financial Development and Growth
Issue of 2014‒10‒17
eight papers chosen by
Iulia Igescu
Ministry of Presidential Affairs

  1. Adam Smith on Capital Accumulation: An economic growth Creation Date: 1984 By R.N. Ghosh
  2. Government Size Threshold and Economic Growth in Iran By Esmaiel ABOUNOORI; Younes NADEMI
  3. Electricity Consumption and Economic Growth: Evidence from Spain By Aitor Ciarreta; Ainhoa Zarraga
  4. Economic Growth and the Welfare State: A Model of Breaks and Starts By FIC Tatiana; GHATE Chetan
  5. Economic Growth and Optimal Income Tax Evasion By Oscar Mauricio VALENCIA ARANA
  6. On the Long-Term Macroeconomic Effects of Social Security Spending: Evidence for 12 EU Countries By Alfredo M. Pereira; Jorge M. Andraz
  7. Why Economic Growth Has Been Weak in Arab Countries: The Role of Exogenous Shocks, Economic Policy Failure and Institutional Defiencies By Peter NUNNENKAMP
  8. The Emperor Has New Clothes: Empirical Tests of Mainstream Theories of Economic Growth By David Greasley; Nick Hanley; Eoin McLaughlin; Les Oxley

  1. By: R.N. Ghosh
  2. By: Esmaiel ABOUNOORI; Younes NADEMI
  3. By: Aitor Ciarreta; Ainhoa Zarraga
  4. By: FIC Tatiana; GHATE Chetan
  5. By: Oscar Mauricio VALENCIA ARANA
  6. By: Alfredo M. Pereira (Department of Economics, College of William and Mary, Williamsburg); Jorge M. Andraz (Faculdade de Economia, Universidade do Algarve, CEFAGE (UALG))
    Abstract: We estimate the long-term impact of social security and social protection spending in a set of twelve EU countries. We estimate country-specific VARs relating GDP, unemployment, savings, and social spending. We find that social spending has a negative effect in most countries while the effects on savings are either not significant or positive but small. In turn, the negative effects on output are significant and in some cases large. Unemployment is the dominant channel through which social spending affects output. Our results imply that any increase in generosity would, under the current situation, bring detrimental macroeconomic effects. In addition, a less distortionary tax mix should be used to finance redistributive spending and the insurance component of the systems should be changed in the direction of a capitalization regime based on defined contributions. Obviously, this transition would take time and would not be costless but neither is maintaining the status quo.
    Keywords: Social security spending; Unemployment; Saving; Output; Fiscal multipliers; VAR; EU.
    JEL: C32 C51 C52 H55
    Date: 2014
  7. By: Peter NUNNENKAMP
  8. By: David Greasley (School of History, Classics and Archaeology, University of Edinburgh); Nick Hanley (School of Geography and Sustainable Development, University of St. Andrews); Eoin McLaughlin (School of Geography and Sustainable Development, University of St. Andrews); Les Oxley (Department of Economics, University of Waikato)
    Abstract: Modern macroeconomic theory utilises optimal control techniques to model the maximisation of individual well-being using a lifetime utility function. Agents face choices over current and future consumption (with resultant implied savings decisions) seeking to maximise the present value of current plus future well-being. However, such inter-temporal welfare- maximising assumptions remain empirically untested. In the work presented here we test whether welfare was in (historical) fact maximised in the US between 1870 -2000 and find empirical support for the optimising basis of growth theory, but only once a comprehensive view of what constitutes a country’s wealth or capital is taken into account.
    Keywords: inter-temporal utility maximisation;modern growth theory; US; comprehensive wealth
    JEL: E21 E22 C61
    Date: 2014–08

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