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on Economic Growth |
| By: | Campbell, Douglas L.; Pyun, Ju Hyun |
| Abstract: | Why are some peoples still poor? Recent research suggests that a society’s “genetic distance”—a measure of the time elapsed since two populations had common ancestry—to the United States is a significant predictor of development even after controlling for an ostensibly exhaustive list of geographic, historical, religious and linguistic variables. We find, by contrast, that the correlation of genetic distance from the US and GDP per capita disappears with the addition of controls for geography including distance from the equator and a dummy for sub-Saharan Africa. |
| Keywords: | Genetics, Economic Development, Geography, Climatic Similarity |
| JEL: | O10 O33 O40 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57933&r=gro |
| By: | Morten Olsen (IESE); David Hemous (INSEAD) |
| Abstract: | We construct an endogenous growth model of directed technical change with automation (the introduction of machines which replace low-skill labor and complement high-skill labor) and horizontal innovation (the introduction of new products, which increases demand for both types of labor). For general processes of technical change, we demonstrate that although low-skill wages can drop during periods of increasing automation intensity, the asymptotic growth rate is weakly positive --- though lower than that of the economy. We then endogenize the evolution of technology and show that the transitional path follows three distinct phases. First, wages are low, such that few machines are used and low-skill wages keep pace with the growth rate of the economy. Then, as wages grow, the share of automated products increases and the economy substitutes towards the use of machines -- depressing the growth rate of low-skill wages (potentially to negative). Finally, as the economy reaches steady state, the share of automated products is constant and the relative growth rate of low-skill wages recovers somewhat, yet remains lower than that of the economy overall. Allowing workers to endogenously transition from low-skill to high-skill alleviates the growth in income inequality, but does not alter the structure of the model. We extend the model to include middle-skill workers and demonstrate that the model endogenously captures the defining characteristics of the U.S. income distribution over the past 50 years: initially a monotone dispersion of the income distribution, and thereafter a wage growth polarization in which middle-skill workers experience the lowest wage growth. Finally, in an extension we allow machines to be produced with a different technology than the consumption good. This allows for faster productivity growth for machines potentially leading to permanently negative growth of low-skill wages. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed014:162&r=gro |
| By: | Thomas K. Bauer; Philipp Breidenbach; Christoph M. Schmidt |
| Abstract: | Using the location of baroque opera houses as a natural experiment, Falck et al. (2011) claim to document a positive causal effect of the supply of cultural goods on today’s regional distribution of talents. This paper raises serious doubts on the validity of the identification strategy underlying these estimates, though. While we are able to replicate the original results, we proceed to show that the same empirical strategy also assigns positive causal effects to the location of historical brothels and breweries. These estimated effects are similar in size and significance to those of historical opera houses. We document that all these estimates reflect the importance of institutions for longrun economic growth, and that the effect of historical amenities on the contemporary local share of high skilled workers disappears upon controlling for regions’ historical importance. |
| Keywords: | Human capital; historical amenities; regional competiveness |
| JEL: | R11 H42 J24 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0493&r=gro |
| By: | Fabian Lange (McGill University); Daniel Aaronson (Federal Reserve Bank of Chicago) |
| Abstract: | By allowing for an extensive margin in the standard quantity-quality, we generate new insights into fertility transitions. We test the model on Southern black women affected by a large-scale school construction program. Consistent with our model, women facing improved schooling opportunities for their children were more likely to have at least one child but chose to have smaller families overall. By contrast, women who themselves obtained more schooling due to the program delayed childbearing along both the extensive and intensive margins and entered higher quality occupations, consistent with education raising opportunity costs of child rearing. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed014:211&r=gro |
| By: | Souleymane Coulibaly |
| Keywords: | Public Sector Management and Reform Macroeconomics and Economic Growth - Subnational Economic Development Communities and Human Settlements - Urban Slums Upgrading Transport Economics Policy and Planning Urban Development - City Development Strategies Public Sector Development Transport |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:17043&r=gro |
| By: | Ohlsson, Henry (Uppsala Center for Labor Studies); Roine, Jesper (SITE, Stockholm School of Economics); Waldenström, Daniel (Uppsala Center for Labor Studies) |
| Abstract: | Inherited wealth has attracted much attention recently, much due to the research by Thomas Piketty (Piketty, 2011; 2014). The discussion has mainly revolved around a long-run contrast between Europe and the U.S., even though data on explicit historical inheritance flows are only really available for France and to some extent for the U.K. We study the long-run evolution of inherited wealth in Sweden over the past two hundred years. The trends in Sweden are similar to those in France and the U.K: beginning at a high level in the nineteenth century, falling sharply in the interwar era and staying low thereafter, but tending to increase in recent years. The levels, however, differ greatly. The Swedish flows were only half of those in France and the U.K. before 1900 and also much lower after 1980. The main reason for the low levels in the nineteenth century is that the capital-income ratio is much lower than in “Old Europe”. In fact, the Swedish capital-income ratio was similar to that in the U.S., but the savings and growth rates were much lower in Sweden than in the U.S. Rap-id income growth following industrialization and increasing savings rates were also important fac-tors behind the development of the capital-income ratio and the inheritance flow during the twenti-eth century. The recent differences in inheritance flows have several potential explanations related to the Swedish welfare state and pension system. Sweden was “un-European” during the nineteenth century because the country was so poor, Sweden is “un-European” today because so much wealth formation has taken place within the welfare state and the occupational pension systems. |
| Keywords: | inheritance; capital accumulation; inverse mortality multiplier |
| JEL: | D30 J10 N10 |
| Date: | 2014–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uulswp:2014_007&r=gro |
| By: | Bruno Lanz; Simon Diet; Tim Swanson |
| Abstract: | We study the interactions between global population, technological progress, per capita income, the demand for food, and agricultural land expansion over the period 1960 to 2100. We formulate a two-sector Schumpeterian growth model with a Barro-Becker representation of endogenous fertility. A manufacturing sector provides a consumption good and an agricultural sector provides food to sustain contemporaneous population. Total land area available for agricultural production is finite, and the marginal cost of agricultural land conversion is increasing with the amount of land already converted, creating a potential constraint to population growth. Using 1960 to 2010 data on world population, GDP, total factor productivity growth and crop land area, we structurally estimate the parameters determining the cost of fertility, technological progress and land conversion. The model closely fits observed trajectories, and we employ the model to make projections from 2010 to 2100. Our results suggest a population slightly below 10 billion by 2050, further growing to 12 billion by 2100. As population and per capita income grow, the demand for agricultural output increases by almost 70% in 2050 relative to 2010. However, agricultural land area stabilizes by 2050 at roughly 10 percent above the 2010 level: growth in agricultural output mainly relies on technological progress and capital accumulation. |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp161&r=gro |
| By: | Voosholz, Frauke |
| Abstract: | This paper considers a model with three overlapping generations of which only the middle one is able to work. There is a trade-off between food and bio-fuel pro- duction. We try to study this trade-off, its influence on economic growth and on resource consumption. The paper should state that even, if the current generation has the total autonomy of decision about the usage of all resources, they will never use them completely. The memebers of the current generation will always leave some resources for production because in the phase of retirement they depend on the income of the next generation, the latter paying back the credit obtained when beeing young. Furthermore, it states that as long as land is an essential input for producing the final product (including food) the amount of land devoted to bio-fuel production will not raise endlessly. The pure consumption loan model by Samuelson (1958) serves as basis for our Overlapping-Generations-Model, which we will integrate into a model of endogenous economic growth with resources, exogenous technical progress and land as a further input. For realization of the optimal consumption pattern, which leads to the maximum of utility, individuals have to make four decisions. They have to commit themselves on the exploitation rate of the non-renewable resource and on the amount of renewable resource used for production. Coincidentally, the allocation of land, necessary for food production and for renewable resource regeneration, and the amount of leisure time devoted for resource production have to be determined. The results are confirmed by numerical examples and will be reviewed by empirical data. -- |
| Keywords: | economic growth,overlapping generations,non-renewable resources,renewable resources,land vs. food trade-off |
| JEL: | D91 O13 Q24 Q32 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cawmdp:70&r=gro |
| By: | Steven Trypsteen |
| Abstract: | This paper investigates the effect of output volatility and the great moderation on growth in a model that simultaneously accounts for cross-country interactions, structural breaks and heterogeneous effects. This is done by augmenting the univariate GARCH-M model of growth for each G7 country with cross-country weighted averages of growth and shift dummies. I find that volatility affects growth positively, that there is a great moderation in five of the G7 countries and that the great moderation has a negative effect on growth in all G7 countries. A simulation exercise shows that cross-country interactions are important in estimating the volatility effect. |
| Keywords: | Cross-country interactions, Volatility, Growth, GARCH-M, The great moderation |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcfc:14/10&r=gro |
| By: | Ferdinand Rauch; Matthias Beestermoller |
| Abstract: | We show that the countries of the former Austro-Hungarian monarchy trade significantly more with one another in the aftermath of the collapse of the Iron Curtain than predicted by a standard gravity model.� This trade surplus declines linearly and monotonically over time.� We argue that these findings suggest that decaying cultural forces explain a significant part of trading capital.� We document the rate of decay of these cultural forces. |
| Keywords: | Trade, Gravity, Culture, Borders, Habsburg Empire, Persistence |
| JEL: | F14 F15 N33 N34 N94 |
| Date: | 2014–08–13 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:718&r=gro |
| By: | Norman Gemmell; Florian Misch; Blanca Moreno-Dodson |
| Keywords: | Public Sector Economics Macroeconomics and Economic Growth - Subnational Economic Development Public Sector Expenditure Policy Macroeconomics and Economic Growth - Economic Stabilization Poverty Reduction - Achieving Shared Growth Public Sector Development |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:17061&r=gro |
| By: | Baglan, Deniz (Howard University); Yoldas, Emre (Board of Governors of the Federal Reserve System (U.S.)) |
| Abstract: | Using data on developing economies, we estimate a flexible semiparametric panel data model that incorporates potentially nonlinear effects of inflation on economic growth. We find that inflation is associated with significantly lower growth only after it reaches about 12 percent, which is notably lower than the comparable estimate obtained from a threshold model. Our results also suggest that models with restrictive functional form assumptions tend to underestimate marginal effects of inflation on economic growth. We also document significant variation in the effect of inflation on growth across countries and over time. |
| Keywords: | Inflation; economic growth; semiparametric panel data model; series estimation; bootstrap |
| JEL: | C23 O40 |
| Date: | 2014–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2014-51&r=gro |
| By: | Yolcu Karadam, Duygu (Department of Economics, METU, Ankara, Turkey); Öcal, Nadir (Department of Economics, METU, Ankara, Turkey) |
| Abstract: | In the literature there is a great debate on the growth effects of international financial integration. It is argued that the direction and the magnitude of the effect of financial integration on growth depend on some structural and economic characteristics of the economies. This implies that financial globalization can have asymmetric effects on economic growth due to some other factors. In this study we examine the effect of financial integration on growth mainly focusing on the threshold effects suggested by economic theory and empirical evidence. To this end, we employ Panel Smooth Transition Regression Models in order to investigate the asymmetric effects in the financial integration-growth relationship for a large number of countries for the period of 1970-2009. Besides estimating the threshold effects for all countries in the sample, we also examine whether these threshold effects differ for different country groups such as emerging economies, other developing countries and advanced countries. Our empirical results showed that international financial integration has asymmetric effects on growth due to financial development, institutional quality, trade openness and some macroeconomic variables of the economies. We also find that the signs and the magnitudes of these effects can differ for emerging, advanced and other developing countries. |
| Keywords: | International financial integration, Economic growth, Panel smooth transition regression model |
| JEL: | F36 F41 F43 O40 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2013:241&r=gro |
| By: | Jörg Baten; Mikolaj Szoltysek (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | Can the 16th and early 17th centuries in Poland-Lithuania and some other east-central European countries be characterized as a “Golden Age” in human capital? We trace the development of a specific human capital indicator during this period: numeracy. We draw upon new evidence for Poland and Russia from the early 17th century onwards; and for Belarus, Ukraine, and Lithuania from the 18th century onwards; controlling for potential selectivity issues. Poland had quite high levels of numeracy during the early 17th century, but these levels subsequently fell below those of even southern Europe. As in other countries in the area, numeracy levels in Poland were lower than those of western Europe during the 17th, 18th, and early 19th centuries. This finding might support the hypothesis that the second serfdom process, which gained momentum during the 17th century, was one of the core reasons why human capital accumulation was delayed in eastern Europe. The major wars in the region also had devastating effects on numeracy levels. (KEYWORDS: Central-Eastern Europe; historical Demography; Eastern Europe; Human Capital; Numeracy; Age-Heaping; census microdata) |
| JEL: | J1 Z0 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2014-008&r=gro |
| By: | Pierre-Richard Agénor; Otaviano Canuto |
| Keywords: | Gender - Gender and Development Rural Development Knowledge and Information Systems Health, Nutrition and Population - Population Policies Gender - Gender and Law Gender - Gender and Health Rural Development |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:17027&r=gro |
| By: | Ljungwall, Christer (Copenhagen Business School); Gustavsson Tingvall, Patrik (The Ratio Institute) |
| Abstract: | Abstract: In this paper we examine whether China has benefited more from spending on R&D than other countries by conducting a meta-analysis of the relevant literature on a large number of countries at different stages of economic development. The results suggest that the growth-enhancing effect of R&D spending in China has been significantly weaker than that of other countries. It is thus unlikely that R&D spending has been successful as a key contributing factor to economic growth in China. |
| Keywords: | meta-analysis; R&D; economic growth; China |
| JEL: | F43 O11 O33 O53 |
| Date: | 2014–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0233&r=gro |