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on Financial Development and Growth |
| By: | Klaus Schmidt-Hebbel (Universidad Catolica de Chile); José Carlos Tello (Departamento de Economía de la PUC del Perú) |
| Abstract: | This paper develops a dynamic general-equilibrium political-economy model for the optimal size and composition of public spending. An analytical solution is derived from majority voting for three government spending categories: public consumption goods and transfers (valued by households), as well as productive government services (complementing private capital in an endogenous-growth technology). Inequality is re ected by a discrete distribution of innitely-lived agents that dier by their initial capital holdings. In contrast to the previous literature that derives monotonic (typically negative) relations between inequality and growth in one-dimensional voting environments, this paper establishes conditions, in an environment of multi-dimensional voting, under which a non-monotonic, inverted U-shape relation between inequality and growth is obtained. This more general result { that inequality and growth could be negatively or positively related { could be consistent with the ambiguous or inconclusive results documented in the empirical literature on the inequality-growth nexus. The paper also shows that the political-economy equilibrium obtained under multi-dimensional voting for the initial period is time-consistent. JEL Classification-JEL: D72, E62, H11, H31 |
| Keywords: | Desigualdad, crecimiento endógeno, votación multidimensional, impuesto endógeno. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pcp:pucwps:wp00380&r=fdg |
| By: | Mohamed El Hedi Arouri (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR6221 - Université d'Orléans); Adel Ben Youssef (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)); Cuong Nguyen-Viet (Chercheur Indépendant - Aucune); Agnès Soucat (Chercheur Indépendant - Aucune) |
| Abstract: | The objective of this paper is to investigate the impacts of urbanization on human capital andeconomic growth in Africa. It seeks to contribute to the urbanization-growth debate byinvestigating how urbanization is linked to human capital accumulation and economic growth.More precisely, compared to previous studies on the urbanization-growth nexus, we (i) focusexclusively on African countries; (ii) consider both direct and indirect channels through whichurbanization may influence economic activity and (iii) examine a long period including theevolutions observed in the recent years. |
| Keywords: | urbanization; economic growth; human capital |
| Date: | 2014–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01068271&r=fdg |
| By: | Douglas Hanley; Ufuk Akcigit; Nicolas Serrano-Velarde |
| Abstract: | This paper introduces a model of endogenous growth through basic and applied research. Basic research differs from applied research in the nature and the magnitude of the generated spillovers. We propose a novel way of empirically identifying these spillovers and embed them in a general equilibrium framework with private firms and a public research sector. After characterizing the equilibrium, we estimate our model using micro-level data on research expenditures by French firms. Our key finding is that standard R&D policies can accentuate the dynamic misallocation in the economy. We also find a strong complementarity between the property rights of basic research and the optimal funding of public research. |
| Keywords: | Innovation, basic research, applied research, research and development, govern- ment spending, endogenous growth, spillover |
| JEL: | O31 O38 O40 L78 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:pit:wpaper:535&r=fdg |
| By: | Daniel Harenberg (ETH Zurich, Switzerland); Alexander Ludwig (CMR & FiFo, University of Cologne) |
| Abstract: | When markets are incomplete, social security can partially insure against idiosyncratic and aggregate risks. We incorporate both risks into an analytically tractable model with two overlapping generations and demonstrate that they interact over the life-cycle. The interactions appear even though the two risks are orthogonal and they amplify the welfare consequences of introducing social security. On the one hand, the interactions increase the welfare benefits from insurance. On the other hand, they can in- or decrease the welfare costs from crowding out of capital formation. This ambiguous effect on crowding out means that the net effect of these two channels is positive, hence the interactions of risks increase the total welfare benefits of social security. |
| Keywords: | social security; idiosyncratic risk; aggregate risk; welfare; insurance; crowding out |
| JEL: | C68 E27 E62 G12 H55 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:14-204&r=fdg |
| By: | Paul Alagidede and George Adu |
| Abstract: | Climate change has been classed as the greatest and urgent global issue facing humanity today, yet the empirics of the debate remain largely muted, more so with reference to sub-Saharan Africa (SSA), where the impact of warming global temperatures are forecasted to have the worst impact. This paper is a contribution to the empirics of climate change and its effect on sustainable economic growth in SSA using nonparametric regression techniques. We establish the following: the relationship between real GDP per capita on one hand and climate change on the other hand, is intrinsically linear and monotonically decreasing at a constant proportionate rate. This relationship holds for both temperature and precipitation. |
| Keywords: | climate change, Sub-Saharan Africa, Sustainable Growth, Nonparametric techniques |
| JEL: | C14 C23 O11 O13 O40 Q54 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:460&r=fdg |
| By: | Stephen M. Miller (University of Nevada, Las Vegas and University of Connecticut); Kyriakos Neanidis (University of Manchester) |
| Abstract: | Do in-cash and in-kind transfers to families affect parental fertility choices and economic welfare differently? We examine this question via a demographic transition channel in the context of a two-period overlapping generations model. In childhood, reproductive agents face a non-zero probability of death, while as adults, they allocate their time to work, leisure, and child rearing activities. Health status in adulthood exhibits "state dependence," as it depends on health in childhood. We find that cash transfers lead to both higher fertility and welfare if parents strongly value the quantity of their children. This positive welfare effect dominates an indirect negative welfare effect due to a lower growth rate. But, if parents value the quality of their children, in-kind transfers yield greater welfare, along with lower fertility and higher economic growth. |
| Keywords: | fertility, health, growth, transfers, welfare |
| JEL: | F35 F43 I12 O41 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2014-24&r=fdg |
| By: | World Bank |
| Keywords: | Public Sector Expenditure Policy Banks and Banking Reform Finance and Financial Sector Development - Debt Markets Public Sector Economics Macroeconomics and Economic Growth - Subnational Economic Development Public Sector Development |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:20266&r=fdg |