nep-gro New Economics Papers
on Economic Growth
Issue of 2014‒08‒28
seven papers chosen by
Marc Patrick Brag Klemp
Brown University

  1. Diversity and Social Capital in the U.S.: A Tale of Conflict, Contact, or Total Mistrust? By Willie Belton; Yameen Huq; Ruth Uwaifo Oyelere
  2. Dynamic Selection: An Idea Flows Theory of Entry, Trade and Growth By Thomas Sampson
  3. 150 Years of Italian CO2 Emissions and Economic Growth By Barbara Annicchiarico; Anna Rita Bennato; Emilio Zanetti Chini
  4. Integration as a spatial institution: Implications for agglomeration and growth By Deeken, Tim; Ott, Ingrid
  5. A Test of the Unraveling Hypothesis: Constitutional Bargaining and the Quality of African Institutions By Congleton, Roger D.; Yoo, Dongwoo
  6. Quo Vadis? Energy Consumption and Technological Innovation in China's Economic Growth By Wei Jin; ZhongXiang Zhang
  7. The Impact of Military Spending and Income Inequality on Economic Growth in Turkey, 1963-2008 By Töngür, Ünal; Elveren, Adem

  1. By: Willie Belton; Yameen Huq; Ruth Uwaifo Oyelere
    Abstract: In this paper, we explore the relationship between ethnic fractionalization and social capital. First, we test for time differences in the impact of ethnic fractionalization on social capital using U.S. data from 1990, 1997, and 2005. Subsequently, we examine the data for evidence of the con flict, contact, and hunker-down theories espoused by Putman in explaining what happens over time when individuals interact with those of differing ethnicities. We find no evidence of heterogeneity in the impact of ethnic fractionalization on social capital over time. In addition, we find evidence of the confl ict theory and no evidence of hunker-down or contact theories. Our results suggest that as communities become more diverse, there is a tendency for social capital to decline.
    Date: 2014–08
  2. By: Thomas Sampson
    Abstract: This paper develops an idea flows theory of trade and growth with heterogeneous firms. New firms learn from incumbent firms, but the diffusion technology ensures entrants learn not only from frontier technologies, but from the entire technology distribution. By shifting the productivity distribution upwards, selection on productivity causes technology diffusion and this complementarity generates endogenous growth without scale effects. On the balanced growth path, the productivity distribution is a traveling wave with an increasing lower bound. Growth of the lower bound causes dynamic selection. Free entry mandates that trade liberalization increases the rates of technology diffusion and dynamic selection to offset the profits from new export opportunities. Consequently, trade integration raises long-run growth. The dynamic selection effect is a new source of gains from trade not found when firms are homogeneous. Calibrating the model implies that dynamic selection approximately triples the gains from trade relative to heterogeneous firm economies with static steady states.
    Keywords: International trade, firm heterogeneity, technology diffusion, endogenous growth
    JEL: F12 O41
    Date: 2014–08
  3. By: Barbara Annicchiarico (DEDI and CEIS, Università di Roma "Tor Vergata"); Anna Rita Bennato (Centre for Competition Policy, University of East Anglia); Emilio Zanetti Chini (DEDI and CEIS, Università di Roma "Tor Vergata")
    Abstract: This paper examines the relationship between economic growth and carbon dioxide emissions in Italy considering the developments in a 150-year time span. Using several statistical techniques, we find that GDP growth and carbon dioxide emissions are strongly interrelated, with a dramatic change of the elasticity of pollutant emissions with respect to output. Our findings highlight lack of structural change in the reduction of the carbon dioxide, suggesting the difficulties for Italy to meet the emissions targets within the Europe 2020 strategy.
    Keywords: Carbon Dioxide Emissions, Time Series Analysis, Italian Economy, Environmental Kuznets Curve
    JEL: Q50 C22
    Date: 2014–07–31
  4. By: Deeken, Tim; Ott, Ingrid
    Abstract: In this article we analyze the interdependent issues of urbanization, growth, and globalization by presenting key empirical facts and relevant underlying economic theories on each. We look more closely, but without providing a detailed formal analysis, at a model by Baldwin and Forslid (2000) that combines a seminal model from the endogenous growth literature (Romer 1990) with one from the new economic geography literature (Krugman 1991). In the analysis the significance of a sophisticated consideration of the concept of integration is pointed out. We investigate the issue of scale, scale economies, and density and the important role integration plays in these considerations as well. We especially argue that future research should more precisely focus on integration as a dynamic concept that does not only affect agglomeration and growth, but which is itself the endogenous outcome of various interdependencies and which complements the institutional settings of the territories that are linked to each other. --
    Keywords: integration,spatial institution,agglomeration,growth
    JEL: O4 R5
    Date: 2014
  5. By: Congleton, Roger D.; Yoo, Dongwoo
    Abstract: This paper focuses on the source of path dependency in institutions. Within a bargaining theory of reform, the domain of bargaining and number of bargains reached determine the path of institutional change. The French and British governments negotiated with their various African independence movements during the 1950s, and produced a relatively large number of relatively liberal independence constitutions. After independence, a series of political and military shocks created natural moments for constitutional reform that unraveled the relatively high-quality political and legal institutions agreed to in the years leading to ndependence, although some unraveled more than others. The African countries that began with the narrowest domain of constitutional bargaining and experienced the fewest political shocks generally have better contemporary institutions than states that began with less restrictive constitutional rules and experienced more constitutional moments.
    Keywords: Decolonization, Independence, Constitutional Negotiations, Constitutional Bargaining, Post-Colonial Reform, Eminent Domain, Takings, Institutions, Africa
    JEL: O43 O55 K11 N47
    Date: 2014–08
  6. By: Wei Jin (School of Public Policy, Zhejiang University); ZhongXiang Zhang (School of Economics, Fudan University)
    Abstract: Whether China maintains its business-as-usual energy-intensive growth trajectory or changes to a sustainable development alternative has significant implications for global energy and climate governance. This paper is motivated to theoretically examine ChinaÕs potential transition from its energy-intensive status quo to an innovation-oriented growth prospect. We develop an economic growth model that incorporates the endogenous mechanism of technological innovation and its interaction with fossil energy use and the environment. We find that from an initial condition with a pristine environment and a small amount of capital installation, the higher dynamic benefits of physical investment will incentivize the investment in physical capital rather than R&D-related innovation. Accumulation of the energy-consuming capital thus leads to an intensive use of fossil energy - an energy-intensive growth pattern. But if the mechanism of R&D-related innovation is introduced into the economy, until the dynamic benefit of R&D is equalized with that of capital investment, the economy embarks on R&D for innovation. As a result, the economy will evolve along an innovation-oriented balanced growth path where consumption, physical capital and technology all grow, fossil energy consumptions decline, and environmental quality improves.
    Keywords: technological innovation, energy consumption, economic growth model
    JEL: Q55 Q58 Q43 Q48 O13 O31 O33 O44 F18
    Date: 2014–08
  7. By: Töngür, Ünal (Middle East Technical University/Economics, Ankara, Turkey); Elveren, Adem (Sutcu Imam University/Economics, Kahramanmaras, Turkey)
    Abstract: An extensive literature on the effect of military expenditures on economic growth yields conflicting results. A crucial issue that has not been investigated in this context is the possible effect of inequality. The impact of military expenditures on economic growth in Turkey has also received substantial attention. However, the majority of these studies are not constructed based on a structural model, but rather examine the causality between the variables in question. Considering these two shortcomings in the literature and the lack of consistent results, this study attempts to provide further evidence for the relationship between military expenditures and economic growth for the case of Turkey by considering income inequality within an augmented Solow growth model. Our findings for the 1963-2008 period show that while income inequality has a positive impact on economic growth, military expenditures have no significant effect.
    Keywords: Military expenditure, growth, income inequality, human capital, Solow growth model
    JEL: C22 H56 O11
    Date: 2013

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