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on Economic Growth |
| By: | John Boyce (University of Calgary) |
| Abstract: | This paper documents that natural resources that are more abundant have higher production, lower prices, higher primary industry revenues, and higher R&D. These empirical facts are explained by a model of biased technological change in which relatively more abundant resources attract greater R&D because the return from obtaining a patent is higher in larger markets. Resource specific R&D may be targeted either towards upstream extraction technologies or towards downstream production technologies, and R&D is subject to diminishing knowledge spillovers and diminishing productivity of labor. The estimated elasticity of substitution between natural resources is greater than one, implying that natural resources are substitutes in production. Declining real resource prices in the face of rising resource production are explained by the increasing productivity of labor as knowledge stocks grow. |
| Date: | 2013–01–21 |
| URL: | http://d.repec.org/n?u=RePEc:clg:wpaper:2013-04&r=gro |
| By: | Ronald Inglehart (Higher School of Economics); Svetlana Borinskaya (Institute of General Genetics, Moscow, Russia); Anna Cotter (University of Michigan); Jaanus Harro (Department of Psychology, University of Tartu, Estonian Centre of Behavioral and Health Sciences); Ronald C. Inglehart (University of Michigan); Eduard Ponarin (Higher School of Economics); Christian Welzel (Center for the Study of Democracy, Leuphana University, Scharnhorststr.) |
| Abstract: | This paper discusses correlations between certain genetic characterestics of the human populations and their aggregate levels of tolerance and happiness. We argue that a major cause of the systematic clustering of genetic characteristics may be climatic conditions linked with relatively high or low levels of parasite. This may lead certain populations to develop gene pools linked with different levels of avoidance of strangers, which helped shape different cultures, both of which eventually helped shape economic development. Still more recently, this combination of distinctive cultural and economic and perhaps genetic factors has led some societies to more readily adopt gender equality and high levels of social tolerance, than others. More tolerant societies tend to be happier because they create a more relaxed environment conducive to happiness. |
| Keywords: | genetic research, World Values Survey, happiness, tolerance. |
| JEL: | E11 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:31/soc/2013&r=gro |
| By: | Chudik, Alexander (Federal Reserve Bank of Dallas); Mohaddes, Kamiar (Federal Reserve Bank of Dallas); Pesaran, M. Hashem (Federal Reserve Bank of Dallas); Raissi, Mehdi (Federal Reserve Bank of Dallas) |
| Abstract: | This paper investigates the long-run effects of public debt and inflation on economic growth. Our contribution is both theoretical and empirical. On the theoretical side, we develop a cross-sectionally augmented distributed lag (CS-DL) approach to the estimation of long-run effects in dynamic heterogeneous panel data models with cross-sectionally dependent errors. The relative merits of the CS-DL approach and other existing approaches in the literature are discussed and illustrated with small sample evidence obtained by means of Monte Carlo simulations. On the empirical side, using data on a sample of 40 countries over the 1965-2010 period, we find significant negative long-run effects of public debt and inflation on growth. Our results indicate that, if the debt to GDP ratio is raised and this increase turns out to be permanent, then it will have negative effects on economic growth in the long run. But if the increase is temporary then there are no long-run growth effects so long as debt to GDP is brought back to its normal level. We do not find a universally applicable threshold effect in the relationship between public debt and growth. We only find statistically significant threshold effects in the case of countries with rising debt to GDP ratios. |
| JEL: | C23 E62 F34 H60 |
| Date: | 2013–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddgw:162&r=gro |
| By: | Claude Diebolt (BETA/CNRS (UMR7522), University of Strasbourg, France); Faustine Perrin (BETA/CNRS (UMR7522), University of Strasbourg, France) |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:afc:wpaper:06-13&r=gro |
| By: | Fung, Ka Wai Terence; Lau, Chi Keung Marco |
| Abstract: | This paper builds up an endogenous growth model à la Aghion and Howitt (1992) and Boucekkine et al (2005). We assume that R&D firms use only investment good as input, instead of final good as hypothesized in the above two models. We show that investment price will be a negative function of aggregate quality index; and thus decline over time. In this model, subsidy on R&D has growth-enhancing effect. Moreover, this model predicts unambiguously that R&D is procyclical. |
| Keywords: | Endogeneous growth model, real business cycle, research and development |
| JEL: | E30 O3 O4 O40 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:52567&r=gro |
| By: | Silvia Marchesi; Valeria Prato |
| Abstract: | This paper studies the impact of debt default on economic growth taking into account the depth of a debt restructuring. More specifically, creditors' losses (or haircuts) are used as proxies of the severity of the default episodes. Analyzing 89 defaults in 72 countries over the period 1979-2005, consistently with previous results in this literature, we find that defaults have a negative and significant impact on short-term output growth. Moreover, controlling for the severity of the default through the haircut's size, we find that the severity of the default is indeed correlated with a further contraction in output one year after the default and with a positive increase in output three years after the default. Therefore, the use of a variable which is taken as a proxy of the severity of the default episode allows us to detect a more lasting (and eventually positive) effect of debt default on growth. |
| Keywords: | Haircuts, Output losses, Sovereign defaults |
| JEL: | F34 G15 H63 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:265&r=gro |
| By: | Molina, Ezequiel; Narayan, Ambar; Saavedra-Chanduvi, Jaime |
| Abstract: | This paper studies the relationship between inequality of opportunity and development outcomes in a cross-country setting. Scholars have long debated the impact of inequality on growth, development, and the quality of institutions in a society. The empirical relationships are however confounded by the notion that"inequality"can be seen as a composite of inequality arising from differences in effort and ability, which would tend to encourage competition and productivity, and inequality attributable to unequal opportunities, particularly in terms of access to basic goods and services, which might translate to wasted human potential and lower levels of development. The analysis in this paper applies a measure of educational opportunities that incorporates inequality between"types"or circumstance groups. Theories from economic history are used to instrument for this type of inequality in a large cross-country dataset. The results seem to confirm the hypothesis that this measure of inequality of opportunity is a better fit for structural inequality than the Gini index of income. The results suggest that inequality of endowments at the outset of history led to unequal educational opportunities, which in turn affected development outcomes such as institutional quality, infant mortality, and economic growth. The findings are robust to several checks on the instrumental variable specification. |
| Keywords: | Economic Theory&Research,Population Policies,Inequality,Poverty Impact Evaluation,Information Security&Privacy |
| Date: | 2013–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6735&r=gro |
| By: | Esposito, Piero; Patriarca, Fabrizio; Perini, Luigi; Salvati, Luca |
| Abstract: | The present study investigates the relationship between land vulnerability to desertification and the evolution of the productive structure in Italy during the last fifty years (1960-2010). The objectives of the study are two-fold: (i) to present and discuss an original analysis of the income-environment relationship in an economic-convergent and environmental-divergent country and (ii) to evaluate the impact of the (changing) productive structure and selected socio-demographic characteristics on the level of land vulnerability. The econometric analysis indicates that the relationship between per capita GDP and land vulnerability across Italian provinces is completely reverted once we move from a cross section analysis to panel estimates. While economic and environmental disparities between provinces go in the same direction, with richer provinces having a better land, over time the growth process increases the desertification risk, with the economic structure acting as a significant variable. |
| Keywords: | Environmental quality, Economic growth, Land degradation, Regional disparities, Italy, Panel data. |
| JEL: | C23 Q24 Q56 R11 |
| Date: | 2013–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:52601&r=gro |
| By: | Shcherbakova, Nadezda |
| Abstract: | This paper explores whether biological mechanisms, induced by the overpopulation of a territory, exert essential influence on cities' growth, and whether the level of economic development of a country is significant, when biological mechanisms are in operation. To answer these questions, four hypotheses, based on the theoretical statements and empirical findings of ethology and demography, are formed. The results of regression analysis of statistical data on national level, applied to test these hypothesis, show that that biological factors should be considered as one of the determinants of cities' growth, but a complex analysis of factors of urban development is needed. The biological mechanisms of population reduction play a significant role in the least and less developed countries: with per capita GDP growth the concentration of population in big cities increases. Total fertility rate varies significantly in these countries, but with population growth it gradually decreases. In more developed countries with high per capita GDP level less than 60% of people live in cities with the population of 1 million inhabitants or more, and a total fertility rate stabilizes there at a simple reproduction level of ca. 2,0 births per woman. |
| Keywords: | urbanization, overpopulation, fertility rate, birth rate, population density |
| JEL: | J13 R12 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:52299&r=gro |
| By: | Islam, Faridul; Shahbaz, Muhammad; Rahman, Mohammad Mafizur |
| Abstract: | The paper implements the autoregressive distributed lag (ARDL) bounds testing, supplemented by the Johansen-Juselius (JJ) approaches to cointegration to explore a long run relation among energy use, economic growth, financial development, capital, and trade openness in Australia. We also apply the vector error correction model (VECM) to understand the short run dynamics. The study period, 1965 – 2009, is hallmarked by major shocks across the globe which can potentially cause structural break in the series. To recognize this possibility, we implement the Zivot-Andrews (1992) and the Clemente et al. (1998) tests. The results confirm the long run relationship among the series. The Granger causality test shows bidirectional causality between energy consumption and economic growth; financial development and energy consumption; trade openness and economic growth; economic growth and financial development; energy consumption and trade openness; and financial development and trade openness. The findings offer fresh perspectives and insight for crafting energy policy for sustained economic growth. |
| Keywords: | Energy, Financial Development, Trade, Structural Break, ARDL, Australia |
| JEL: | E00 |
| Date: | 2013–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:52546&r=gro |
| By: | Sergey Kadochnikov; Anna Fedyunina |
| Abstract: | This study investigates the relationship between export structure and economic growth in Russian regions. We hypothesize that it is not industry variety per se but the variety of related industries located relatively close to each other in the product space that significantly contributes to economic growth in Russian regions. The empirical analysis presented in the paper confirms that the density of the product space around the products for which a region had a comparative advantage determined the economic development in Russian regions in the 2003-2008 period. We conclude that the presence of a local related variety of industries in a region is one of the most important regional factors in economic development. |
| Keywords: | export, economic growth, Russian regions |
| JEL: | F14 R11 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1327&r=gro |
| By: | Adeniji, Sesan |
| Abstract: | This study investigates the upshot of external debt on economic growth in West African countries using panel data techniques of analysis for a period of 1971 -2012. The aftermath of the analysis shows a negative and significant relationship between external debt and economic growth in the economies of the countries under consideration. This is in no way different from what economic theories preached and the outcome of some previous research work on the issue. Therefore, we suggest that government should endeavor to put-in necessary measure to ensure judicious use of fund obtain from abroad for the purpose which they are acquired considering the highest priority of the project and also develop effective and efficient external debt management strategies that will favour timely repayment or liquidation of the debt to avoid debt overhanging. |
| Keywords: | Keywords: External Debt, Economic Growth and Panel data. |
| JEL: | C23 F34 F43 |
| Date: | 2013–12–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:52555&r=gro |
| By: | Sebri, Maamar; Ben Salha, Ousama |
| Abstract: | The current study investigates the causal relationship between economic growth and renewable energy consumption in the BRICS countries over the period 1971-2010 within a multivariate framework. The ARDL bounds testing approach to cointegration and vector error correction model (VECM) are used to examine the long-run and causal relationships between economic growth, renewable energy consumption, trade openness and carbon dioxide emissions. Empirical evidence shows that, based on the ARDL estimates, there exist long-run equilibrium relationships among the competing variables. Regarding the VECM results, bi-directional Granger causality exists between economic growth and renewable energy consumption, suggesting the feedback hypothesis, which can explain the role of renewable energy in stimulating economic growth in BRICS countries. |
| Keywords: | ARDL; BRICS; Granger causality; Economic growth; Renewable energy. |
| JEL: | C32 Q2 Q3 Q4 |
| Date: | 2013–12–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:52535&r=gro |
| By: | Dandume, Muhammad Yusuf |
| Abstract: | Emerging consensuses among growth economists view good institutions as the key determinant of improving economic growth. This study examines weather institutions measures, such as more transparent, accountable government, rule of law, sound civil liberty and competitive political participation are precondition for implementing policies for achieving economic growth in Nigeria. In order to obtain the aforementioned objective, we employed ARDL approach to co-integration and Causality. The findings of this study indicate long run relationships between institutions and economic growth. However, on the direction of the relationship the findings suggest two –way causal relationship, which implies, economic growth and Institution causes each other. In other words despite, much rhetoric to the contrary good institutions in Nigeria requires resources, which implies that poor institutions are associated with having low income. The policy implication is that for Nigeria to achieved better institutions emphasis must be given to critical growth driven sectors. |
| Keywords: | Institutions, Growth, Sustainable Development, Nigerian Economy |
| JEL: | P30 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:52356&r=gro |
| By: | Muhammad, Yusuf |
| Abstract: | The paper examines empirically, the effects of corruption on inequality of income and economic growth. Firstly, the long run structural relationship is examined through the technique of Autoregressive distributed lag model (ARDL). Secondly, the causality relationship is measured empirical results suggest a long run relationship between corruption, inequality of income and economic growth in the Nigeria. Emphasizing on the channels of influence of growth, the finding, in the dynamic corruption equation indicates that the coefficient of the economic growth is significantly negative. This implies that despite much rhetoric to the contrary fighting corruption in Nigeria requires resources. More so, the finding suggests inequality of income directly impact on economic growth. This implies that economic growth rises with inequality of income. The policy implication is that Nigeria economic growth problems are structural as such fighting corruption require huge economic resources. |
| Keywords: | Co-integration, Inequality of income, per -capita income, Poverty |
| JEL: | O10 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:52348&r=gro |