nep-gro New Economics Papers
on Economic Growth
Issue of 2014‒04‒11
twenty papers chosen by
Marc Patrick Brag Klemp
Brown University

  1. The Wild West is Wild: The Homicide Resource Curse By Mathieu Couttenier; Pauline Grosjean; Marc Sangnier
  2. The Wages of Women in England, 1260-1850 By Jane Humphries; Jacob Weisdorf
  3. Human Capital and Regional Development By Nicola Gennaioli; Rafael LaPorta; Florencio Lopez-de-Silanes; Andrei Shleifer
  4. Land Reforms, Status and Population Growth By Lehmijoki, Ulla; Palokangas, Tapio K.
  5. Roadblocks on the Road to Grandma's House: Fertility Consequences of Delayed Retirement By Battistin, Erich; De Nadai, Michele; Padula, Mario
  6. Education and the Transition to Sustained Democracy By Jesus Crespo Cuaresma; Doris A. Oberdabernig
  7. The transmission of longevity across generations: The case of the settler Cape Colony By Piraino, Patrizio; Muller, Sean; Cilliers, Jeanne; Fourie, Johan
  8. Human-Mobility Networks, Country Income, and Labor Productivity By Giorgio Fagiolo; Gianluca Santoni
  9. Green growth: theory and evidence By Huang, Yongfu; Quibria, M. G.
  10. Biased Technological Change: A contribution to the debate. By Feder, Christof
  11. Do poverty traps exist ? By Kraay, Aart; McKenzie, David
  12. "Growth with Unused Capacity and Endogenous Depreciation" By Fabrizio Patriarca; Claudio Sardoni
  13. Is Harrod-neutrality Needed for Balanced Growth? Uzawa's Theorem Revisited By Li, Defu; Huang, Jiuli; Zhou, Ying
  14. Revisting the Steady-State Equilibrium Conditions of Neoclassical Growth Models By Li, Defu; Huang, Jiuli; Zhou, Ying
  15. Assessing Foreign Aid.s Long-Run Contribution to Growth in Development By Arndt, Channing; Jones, Sam; Tarp, Finn
  16. “Innovation Adoption and Productivity Growth: Evidence for Europe” By Rosina Moreno; Jordi Suriñach
  17. Aid and income: Another time-series perspective By Lof, Matthijs; Mekasha, Tseday Jemaneh; Tarp, Finn
  18. The Impact of UN and US Economic Sanctions on GDP Growth By Florian Neumeier; Matthias Neuenkirch
  19. The global partnership for inclusive growth By Huang, Yongfu; Quibria, M. G.
  20. Valuation of sequential R&D investment under technological, market, and rival preemption uncertainty By Michi Nishihara

  1. By: Mathieu Couttenier (University of Lausanne.); Pauline Grosjean (School of Economics, Australian School of Business, the University of New South Wales); Marc Sangnier (Aix-Marseille University, Aix-Marseille School of Economics, CNRS & EHESS.)
    Abstract: We uncover interpersonal violence as a dimension and a mechanism of the re- source curse. We rely on a historical natural experiment in the United States, in which mineral discoveries occurred at various stages of governmental territorial ex- pansion. “Early” mineral discoveries, before full-fledged rule of law is in place in a county, are associated with higher levels of interpersonal violence, both historically and today. The persistence of this homicide resource curse is partly explained by the low quality of (subsequent) judicial institutions. The specificity of our results to violent crime also suggests that a private order of property rights did emerge on the frontier, but that it was enforced through high levels of interpersonal violence. The results are robust to state-specific effects, to comparing only neighboring counties, and to comparing only discoveries within short time intervals of one another.
    Keywords: Homicide, Institutions, Resource curse, United States
    JEL: K42 N51 Z13
    Date: 2014–03
  2. By: Jane Humphries; Jacob Weisdorf
    Abstract: This paper presents a wage series for unskilled English women workers from 1260 to 1850 and compares it with existing evidence for men.� Our series cast light on long run trends in women's agency and wellbeing, revealing an intractable, indeed widening gap between women and men's remuneration in the centuries following the Black Death.� This informs several debates: first whether or not "the golden age of the English peasantry" included women; and second whether or not industrialization provided women with greater opportunities.� Our contributions to both debates have implications for analyses of growth and trends in wellbeing.� If the rise in wages that followed the Black Death enticed female servants to delay marriage, it contributed to the formation of the European Marriage Pattern, a demographic regime which positioned England on a path to modern economic growth.� If the industrial revolution provided women with improved economic options, their gains should be included in any overall assessment of trends in the standard of living distorts the overall evaluation of the gains from industrialization.
    Keywords: Black Death, England, gender wage gap, industrial revolution, gender segregation, wages, women
    JEL: J3 J4 J5 J6 J7 J8 N33
    Date: 2014–03–10
  3. By: Nicola Gennaioli; Rafael LaPorta; Florencio Lopez-de-Silanes; Andrei Shleifer
    Abstract: We investigate the determinants of regional development using a newly constructed database of 1569 sub-national regions from 110 countries covering 74 percent of the world’s surface and 96 percent of its GDP. We combine the cross-regional analysis of geographic, institutional, cultural, and human capital determinants of regional development with an examination of productivity in several thousand establishments located in these regions. To organize the discussion, we present a new model of regional development that introduces into a standard migration framework elements of both the Lucas (1978) model of the allocation of talent between entrepreneurship and work, and the Lucas (1988) model of human capital externalities. The evidence points to the paramount importance of human capital in accounting for regional differences in development, but also suggests from model estimation and calibration that entrepreneurial inputs and human capital externalities are essential for understanding the data.
  4. By: Lehmijoki, Ulla (University of Helsinki); Palokangas, Tapio K. (University of Helsinki)
    Abstract: In this document, we consider the effects of a land reform on economic and demographic growth by a family-optimization model with sharecropping, endogenous fertility and status seeking. We show that tenant farming is the major obstacle to escaping the Malthusian trap with high fertility and low productivity. A land reform provides peasant families higher returns for their investments in land, encouraging them to increase their productivity of land rather than their family size. This decreases fertility and increases productivity in agriculture in the short and long runs. The European demographic history provides supporting evidence for this.
    Keywords: land reforms, population growth, status seeking, sharecropping
    JEL: O41 J13 N33
    Date: 2014–03
  5. By: Battistin, Erich (Queen Mary, University of London); De Nadai, Michele (University of Padova); Padula, Mario (Ca' Foscari University of Venice)
    Abstract: This paper investigates the role of childcare provided by grandparents for the fertility decisions of their offspring. We exploit a decade of pension reforms in Italy that mandated the grandparental generation to a working horizon longer than they would have had otherwise. We argue that the rise in retirement age meant a negative shock to the supply of informal childcare for the next generation. Our results show that one additional grandparent available in the early child-bearing years increases by about five percent the number of children. We show that the fertility effects of delayed retirement are limited to close-knits with a strong familistic structure. The result is not just the mechanical consequence of delayed exit from parental home, of more investment in education or of more attachment to the labour market. In light of the Italian lowest low fertility we conclude that pension reforms may have had unintended inter-generational effects. This conclusion is consistent with the sharp drop in total fertility documented by official statistics for the most conservative areas of the country.
    Keywords: fertility, informal child care, pension reforms
    JEL: J08 J13 H42
    Date: 2014–03
  6. By: Jesus Crespo Cuaresma (Department of Economics, Vienna University of Economics and Business); Doris A. Oberdabernig (Department of Economics, Vienna University of Economics and Business)
    Abstract: We study empirically the role of education, age structure and other socioeconomic factors as a determinant of the transition to stable democratic regimes. Our findings suggest that educational improvements (in particular in primary education) and policies towards reducing inequalities in educational attainment play a particularly important role as a catalyst of sustainable democratization processes.
    Keywords: Democracy, Education, Age Structure, Economic Development
    JEL: I20 J10 O11 P26
    Date: 2014–03
  7. By: Piraino, Patrizio (SALDRU, School of Economics, University of Cape Town); Muller, Sean (SALDRU, School of Economics, University of Cape Town); Cilliers, Jeanne (Stellenbosch University); Fourie, Johan (Stellenbosch University)
    Abstract: Evidence on long-term multigenerational dynamics is often inadequate as large datasets with multiple generations remain very uncommon. We posit that genealogical records can offer a valuable alternative. Rather than exploring the intergenerational transmission of socioeconomic status, we rely on birth and death dates of eighteenth and nineteenth century settlers in South Africa's Cape Colony to estimate the intergenerational transmission of longevity. We find that there is a positive and significant association between parents' and offspring's life duration, as well as between siblings. Although these correlations persist over time, the coefficients are relatively small. While the effect of grandparents' longevity on that of grandchildren is insignificant, the cousin correlations suggest that inequality in longevity might persist across more than two generations. We suggest that family and environmental factors shared by cousins, beyond grandparental longevity, can explain these results.
    Keywords: intergenerational mobility; longevity
    JEL: J62 N37
    Date: 2013
  8. By: Giorgio Fagiolo; Gianluca Santoni
    Abstract: This paper asks whether the level of integration of world countries in the international network of temporary human mobility can explain differences in their per-capita income and labor productivity. We disentangle the role played by global country centrality in the network from traditional openness measures, which only account for local, nearest- neighbor linkages through which ideas and knowledge can flow. Using 1995-2010 data, we show that global country centrality in the temporary human-mobility network enhances both per-capita income and labor productivity. Our results hold cross-sectionally, as well as in a dynamic-panel estimation, and take into account potential endogeneity issues. Our findings imply that how close a country is to the theoretical technological frontier, depends not only on how much she is open to temporary human mobility, but mostly on whether she is embedded in a web of relationships connecting her with other influential partners in the network. Our exercises also suggest that most of the gain in income and productivity can be attained if country centrality in the network comes mostly from influential partners that lie not too far away from, but neither too close to them in the network.
    Keywords: temporary human-mobility network; International technological diffusion; Per-capita income; Productivity; Openness to mobility and trade; Centrality.
    Date: 2014–03–30
  9. By: Huang, Yongfu; Quibria, M. G.
    Abstract: What are the major determinants of green growth? What role can the government play to promote green growth? To address these questions, this paper develops a simple Green Solow model that sheds light on the role of finance and technology in the process of
    Keywords: green growth, convergence, neighbouring effects, political and economic structural reforms, political and economic shocks
    Date: 2013
  10. By: Feder, Christof (University of Turin)
    Abstract: Antonelli and Quatraro (2010) apply a speciÖc methodology to identify the e§ects of biased technological change on productivity growth. However, this method has been criticized by Ji and Wang (2014). This research note is a reply to their critique.
    Date: 2014–03
  11. By: Kraay, Aart; McKenzie, David
    Abstract: This paper reviews the empirical evidence on the existence of poverty traps, understood as self-reinforcing mechanisms through which poor individuals or countries remain poor. Poverty traps have captured the interest of many development policy makers, because poverty traps provide a theoretically coherent explanation for persistent poverty. They also suggest that temporary policy interventions may have long-term effects on poverty. However, a review of the reduced-form empirical evidence suggests that truly stagnant incomes of the sort predicted by standard models of poverty traps are in fact quite rare. Moreover, the empirical evidence regarding several canonical mechanisms underlying models of poverty traps is mixed.
    Keywords: Rural Poverty Reduction,Achieving Shared Growth,Economic Theory&Research,Debt Markets,Poverty Reduction Strategies
    Date: 2014–04–01
  12. By: Fabrizio Patriarca; Claudio Sardoni
    Abstract: This paper contributes to the debate on income growth and distribution from a nonmainstream perspective. It looks, in particular, at the role that the degree of capacity utilization plays in the process of growth of an economy that is not perfectly competitive. The distinctive feature of the model presented in the paper is the hypothesis that the rate of capital depreciation is an increasing function of the degree of capacity utilization. This hypothesis implies analytical results that differ somewhat from those yielded by other Kaleckian models. Our model shows that, in a number of cases, the process of growth can be profit-led rather than wage-led. The model also determines the value to which the degree of capacity utilization converges in the long run.
    Keywords: Kaleckian Models of Growth; Capital Accumulation; Capital Depreciation; Income Distribution and Growth
    JEL: E12 E25 O40
    Date: 2014–04
  13. By: Li, Defu; Huang, Jiuli; Zhou, Ying
    Abstract: Taking into account the adjustment costs of investment, this paper proves that it is not the neoclassical growth model itself but the specific form of capital accumulation function that requires technical change to exclusively be Harrod neutral in steady state. Uzawa’s(1961)steady-state growth theorem holds only when the marginal efficiency of capital accumulation is constant, which implies that the capital supply is infinitely elastic. Therefore, it is unnecessary to make strong assumptions about the shape of the production function and the direction of technical change for neoclassical growth model to exhibit steady-state growth.
    Keywords: Neoclassical Growth Model; Uzawa’s Steady-state Growth Theorem; Direction of Technical Change;Adjustment Cost
    JEL: E13 O33 O41
    Date: 2014
  14. By: Li, Defu; Huang, Jiuli; Zhou, Ying
    Abstract: Since the publication of Uzawa(1961), it has been widely accepted that technical change must be purely labor-augmenting for a growth model to exhibit steady-state path. But in this paper, we argue that such a constraint is unnecessary. Further, our model shows that, as long as the sum of the growth rate of marginal efficiency of capital accumulation and the rate of capital-augmenting technological progress equals zero, steady-state growth can be established without constraining the direction of technological change. Thus Uzawa’s theorem represents only a special case, and the explanatory power of growth models would be greatly enhanced if such a constraint is removed.
    Keywords: Neoclassical Growth Model; Uzawa’s Steady-state Growth Theorem; Direction of Technical Change;Adjustment Cost
    JEL: E13 O33 O41
    Date: 2013–05
  15. By: Arndt, Channing; Jones, Sam; Tarp, Finn
    Abstract: This paper confirms recent evidence of a positive impact of aid on growth and widens the scope of evaluation to a range of outcomes including proximate sources of growth (e.g., physical and human capital), indicators of social welfare (e.g., poverty and i
    Keywords: growth, foreign aid, aid effectiveness, simultaneous equations
    Date: 2013
  16. By: Rosina Moreno (Faculty of Economics, University of Barcelona); Jordi Suriñach (Faculty of Economics, University of Barcelona)
    Abstract: The idea in this paper is to provide an empirical verification of the relationship between innovation adoption and productivity growth. After a brief revision of the literature about the concept and main determinants of innovation adoption/diffusion, the paper provides empirical evidence of the above-mentioned relationship through means of descriptive statistics and subsequently, we study the impact that innovation adoption may have on productivity growth through a regression analysis. The analysis is made with the statistical information provided by the Community Innovation Survey in its third and fourth waves, which concern innovative activities carried out between 1998 and 2000 and between 2002 and 2004 respectively. The countries covered are the 25 EU Member States plus Iceland and Norway as well as Turkey.
    Keywords: Innovation, Innovation adoption, Productivity, Europe, Community Innovation Survey. JEL classification: C8, J61, O31, O33, R0
    Date: 2014–04
  17. By: Lof, Matthijs; Mekasha, Tseday Jemaneh; Tarp, Finn
    Abstract: In a recent article, Nowak-Lehmann, Dreher, Herzer, Klasen, and Mart.nez-Zarzoso (2012) (henceforth NDHKM) conclude that foreign aid has not had a significant effect on income, based on evidence from panel data potentially covering 131 countries over the
    Keywords: foreign aid, growth, time series, VAR models
    Date: 2013
  18. By: Florian Neumeier (University of Marburg); Matthias Neuenkirch (University of Trier)
    Abstract: In this paper, we empirically assess how economic sanctions imposed by the UN and the US affect the target states' GDP growth. Our sample includes 68 countries and covers the period 1976-2012. We find that sanctions imposed by the UN have a statistically and economically significant influence on economic growth, but that the effect of US sanctions is less clear. On average, the imposition of UN sanctions decreases the target state's real per capita GDP growth rate by 2.3-3.5 percentage points (pp). Comprehensive UN economic sanctions, that is, embargoes affecting nearly all economic activity, trigger a reduction in GDP growth by more than 5 pp.
    Keywords: Economic growth, economic sanctions, United Nations, United States.
    JEL: F43 F51 F52 F53
    Date: 2014
  19. By: Huang, Yongfu; Quibria, M. G.
    Abstract: This paper investigates the determinants of inclusive growth with a focus on foreign aid. Based on the Solow growth model, a theoretical model has been developed which shows that foreign aid can stimulate inclusive growth if it is effectively used for aug
    Keywords: inclusive growth, aid effectiveness, post-2015 development agenda, access to water, access to sanitation, primary school enrolment, limited information maximum likelihood
    Date: 2013
  20. By: Michi Nishihara (Graduate School of Economics, Osaka University)
    Abstract: We develop a real options model for evaluating and optimizing an R&D project. The model can capture key features of R&D, including research duration, growth opportunity, debt financing, and uncertainty of technological, demand market, and rival preemption. Nevertheless, it is computationally tractable and thus helps practitioners to evaluate various cases of R&D investment. Further, by analyzing the model with a wide range of parameter values, we unveil the interactions of key R&D features. The effect of duration on investment depends on whether there is a possibility of rival preemption. Higher uncertainty of research duration speeds up project inception in the presence of rival preemption. Higher uncertainty of technological success, combined with a growth opportunity embedded in the R&D project, accelerates investment. Debt financing can greatly decrease time lag between the first stage project and growth project. These results are consistent with the empirical evidence.
    Keywords: R&D; technological uncertainty; investment lag; real options; compound option.
    JEL: G31 G33
    Date: 2014–04

This nep-gro issue is ©2014 by Marc Patrick Brag Klemp. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.