nep-gro New Economics Papers
on Economic Growth
Issue of 2015‒01‒19
nineteen papers chosen by
Marc Klemp
Brown University

  1. Historical Conflict and State Development By Mark Dincecco; James Fenske; Massimiliano Gaetano Onorato
  2. Longevity and the rise of the West: lifespans of the European elite, 800-1800 By Neil Cummins
  3. Cooperating against inequality? War and commons in Renaissance Lombardy By Matteo Di Tullio
  4. Technological capabilities and growth: A study of economic convergence among Chinese prefectures By Federico Frattini; Francesco Nicolli; Giorgio Prodi
  5. Endogenous Property Rights, Conflict Intensity And Inequality In Asymmetric Rent-Seeking Contest By Alexander M. Yarkin
  6. Specific and General Human Capital in an Endogenous Growth Model By Evangelia Vourvachaki; Vahagn Jerbashian; : Sergey Slobodyan
  7. Fertility, agricultural labor supply, and production: Instrumental variable evidence from Uganda: By Van Campenhout, Bjorn
  8. The spatial curse of natural resources By Fabrizio Carmignani
  10. The geographic dimensions of institutions By Bhupatiraju S.
  11. The Nexus of Economic and Institutional Evolution By Bilin Neyapti; Yavuz Arasil
  12. Temperate climate - Innovative outputs nexus By Coccia M.
  13. Efficiency, Policy Selection, And Growth In Democracy And Autocracy: A Formal Dynamical Model By Andrei S. Akhremenko; Alexander Petrov
  14. The long run development of Chile and the Natural Resources curse. Linkages, policy and growth, 1850-1950 By Marc Badia-Miró; Cristián A. Ducoing
  15. The Effect of Military Expenditure on Growth: An Empirical Synthesis By Sefa Awaworyi; Siew Ling Yew
  16. The Direct and Indirect Effects of Small Business Administration Lending on Growth: Evidence from U.S. County-Level Data By Andrew T. Young; Matthew J. Higgins; Donald J. Lacombe; Briana Sell
  17. Government Transfers and Growth: Is there Evidence of Genuine Effect? By Sefa Awaworyi; Siew Ling Yew
  18. Beyond agriculture versus nonagriculture: Decomposing sectoral growth–poverty linkages in five African countries: By Dorosh, Paul A.; Thurlow, James
  19. Towards understanding economic growth in Africa: A reinterpretation of the Lewis Model: By Diao, Xinshen; McMillan, Margaret S.

  1. By: Mark Dincecco; James Fenske; Massimiliano Gaetano Onorato
    Abstract: We show that the long-run consequences of historical warfare are different for Sub-Saharan Africa than for the rest of the Old World. We identify the locations of over 1,750 conflicts in Africa, Asia, and Europe from 1400 to 1799. We find that historical warfare predicts greater state capacity today across the Old World, including in Sub-Saharan Africa. There is no significant correlation between historical warfare and current civil conflicts across the rest of the Old World. However, this correlation is strong and positive in Sub-Saharan Africa. Thus, while a history of conflict predicts higher per capita GDP for the rest of the Old World, this positive consequence is overturned for Sub-Saharan Africa.
    Date: 2014
  2. By: Neil Cummins
    Abstract: I analyse the age at death of 121,524 European nobles from 800 to 1800. Longevity began increasing long before 1800 and the Industrial Revolution, with marked increases around 1400 and again around 1650. Declines in violence contributed to some of this increase, but the majority must reflect other changes in individual behavior. The areas of North-West Europe which later witnessed the Industrial Revolution achieved greater longevity than the rest of Europe even by 1000AD. The data suggest that the `Rise of the West' originates before the Black Death.
    Keywords: Mortality; Health; Nobility; Divergence
    JEL: O52 I3
    Date: 2014–09
  3. By: Matteo Di Tullio
    Abstract: The aim of this paper is to understand how traditional societies faced a period of general crises and more specifically, which behaviours were adopted to limit the increase of local socio-economic inequality. Thus, this paper focuses on a boundary area (the Geradadda) disputed by Milan and Venice that was constantly crossed and occupied by armies during the long period of the Italian Wars (1494-1559). Analysing the management of local finances, and specifically the local commons, it is possible to show the different ways in which these societies organized themselves and, generally, how economic growth occurred in the early modern period.
    Keywords: Commons, Inequality, Cooperation, Italian Wars, Sixteenth Century, Rural societies
    Date: 2014–12
  4. By: Federico Frattini (Department of Economics and Management, University of Ferrara, Italy.); Francesco Nicolli (IRCReS-CNR, Italy; Department of Economics and Management, University of Ferrara, Italy.); Giorgio Prodi (Department of Economics and Management, University of Ferrara, Italy; CCWE - Tsinghua University, Beijing, China.)
    Abstract: The paper focuses on the role of technological capabilities in pushing regional catch-up in China. A leading force behind its fast economic growth has been the government action in reforming rules and institutions and supporting structural change in the long run. The local clustering process of technological capabilities represents an important piece in this strategy. The regional endowment of technological capabilities is approached by the geographical distribution of innovation activities among prefectures. The analysis aims to verify if there is convergence among the prefectural income levels and technological capabilities positively affect the intra-national catching-up process. Accordingly, this contribution presents a growth convergence estimation model that includes four indexes for innovation systems already adopted in literature. Indicators refer to the information about Chinese patent applications at EPO in the period 1996–2010 (OECD REGPAT and Citations databases, January 2014). In order to fit the research questions, patent data have been restricted, re-organized and originally regionalized by the authors running a semantic search of prefectures’ names in the “address” field associated to each Chinese inventor. Main results show that an absolute convergence process already started, although disparities decline slowly, and the accumulation of technological capabilities can foster this dynamic.
    Keywords: Buen Vivir, China, growth, patent, region, catch-up
    JEL: O30 O47 O53 R19
    Date: 2014–12
  5. By: Alexander M. Yarkin (National Research University Higher School of Economics)
    Abstract: Does less inequality in wealth distribution imply better property rights protection? In this paper we show that this impact is non monotonous and is conditional on a) equilibrium type: conflict (rent-seeking) or peace, b) the reasons of changes in wealth distribution, and c) the size of the ruling class, “elite”. In the conflict stage, institutional quality positively depends on the wealth of the elite, but negatively – on the size of the elite class. However, the transition from conflict to peace stage (with no rent-seeking and fast growth) requires the reduction of inequality. This generates an institutional trap. Moreover, the intensity of rent-seeking behavior increases both with progressive redistribution of wealth and with widening of the ruling class. Our results allow characterizing wealth distributions, wherein it is better to redistribute wealth or to expand the ruling class in order to improve institutions and limit rent-seeking incentives
    Keywords: property rights institutions, inequality, rent-seeking, wealth distribution, institutional traps, conflict, economic development
    JEL: D31 D72 D74 O17 P26
    Date: 2014
  6. By: Evangelia Vourvachaki; Vahagn Jerbashian; : Sergey Slobodyan
    Abstract: In this paper, we define specific (general) human capital in terms of the occupations whose use is spread in a limited (wide) set of industries. We analyze the growth impact of an economy's composition of specific and general human capital, in a model where education and R&D are costly and complementary activities. The model suggests that a declining share of specific human capital, as observed in the Czech Republic, can be associated with a lower rate of long run growth. We also discuss optimal educational policies in the presence of market frictions.
    Keywords: human capital types; economic growth; education policy
    JEL: O52 O40 O49 I20
    Date: 2014–12
  7. By: Van Campenhout, Bjorn
    Abstract: Human fertility is likely to affect agricultural production through its effect on the supply of agricultural labor. Using the fact that in traditional, patriarchal societies sons are often preferred to daughters, we isolated exogenous variation in the number of children born to a mother and related it to agricultural labor supply and production outcomes in Uganda—a country that combines a dominant agricultural sector with one of the highest fertility rates in the world. We found that fertility has a sizable negative effect on household labor allocation to subsistence agriculture. Households with lower fertility devote significantly more time to land preparation and weeding, while larger households grow less matooke and sweet potatoes. We found no significant effect on agricultural productivity as measured in terms of yield per land area.
    Keywords: Gender, households, Labor supply, Population growth, Sociology, fertility, instrumental variables, boy preference,
    Date: 2014
  8. By: Fabrizio Carmignani
    Keywords: Spatial resource curse, income regressions, growth regressions
    JEL: O13 C31 O11 O40
    Date: 2014–05
  9. By: Asadul Islam; Chandarany Ouch; Russell Smyth; Liang Choon Wang
    Abstract: This paper examines the long-term effects of exposure to civil war and genocide on the educational attainment and labor productivity of individuals in Cambodia. Given the well-documented causal links between schooling and labor productivity, it is surprising that past studies show that civil conflicts reduce educational attainment, but generally not earnings of individuals. Using variation in the degree of Cambodians’ exposure to civil conflicts during primary school age, we find that disruption to primary education during civil conflicts decreases educational attainment and earnings, increases fertility and has negligible effects on health of individuals several decades later. Our findings suggest that the effect of conflict on schooling disruption has adverse consequences on long-term labour productivity and economic development.
    Keywords: Civil Conflict, Khmer Rouge, Education, Wage, Fertility, Returns to schooling.
    JEL: I21 J24 O12 N35
    Date: 2014–09
  10. By: Bhupatiraju S. (UNU-MERIT)
    Abstract: In this paper we examine the role of institutions relative to economic performance, absolute geography and financial performance of a country. In order to do this, we use the spatial principal component analysis and a spatial canonical correlation analysis to obtain multi-dimensional measure of institutions, economic performance, absolute geography and financial performance of countries. Our analysis shows that the first canonical functions in all the cases give us results that conform to current literature. That is, we find that a higher level of development is correlated to a higher level of institutional quality, deeper financial structure as well as good geography of the Jeffery Sachs variety. From the second canonical functions we find that economic growth is correlated to market steering. We further find that geographic conditions need not define the institutional set up of countries. A similar institutional set up need not result in a similar financial structure in countries. We show that there is a necessity to take spatial interactions with neighbouring countries into account while analysing the relationships between institutions, geography, economic and financial performance of a country. We find that space indeed has a strong influence on the prevailing institutional and economic conditions of countries. While the impact of space on geography is very obvious, we find that it has no bearing on the financial performance of countries.
    Keywords: Economic Development: General; Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance; Formal and Informal Sectors; Shadow Economy; Institutional Arrangements; Institutions and Growth; Size and Spatial Distributions of Regional Economic Activity; General Regional Economics: Econometric and Input-Output Models; Other Models;
    JEL: O10 O16 O17 O43 R12 R15
    Date: 2014
  11. By: Bilin Neyapti; Yavuz Arasil
    Abstract: Modeling the evolution of formal institutions in relation to the evolution of economic and informal institutionaldevelopment. Discrete time optimization; simulation. The punctuations and the evolution formal institutional quality depends on the extent of economic heterogenety.
    Keywords: Theoretical-general, Growth, Optimization models
    Date: 2014–07–03
  12. By: Coccia M. (UNU-MERIT)
    Abstract: Technological change is a vital human activity that interacts with geographic factors and environment. The purpose of the study here is to analyse the relationship between geo-climate zones of the globe and technological outputs in order to detect favourable areas that spur higher technological change and, as a consequence, human development. The main finding is that innovative outputs are higher in geographical areas with a temperate climate latitudes. In fact, warm temperate climates are favourable environments for human societies that, by a long-run process of adaptation and learning, create platforms of institutions and communications systems, infrastructures, legal systems, economic governance and socio-economic networks that support inventions and diffusion of innovations. The linkages between observed facts show the vital geo-climate sources of fruitful patterns of the technological innovation and economic growth.
    Keywords: Economic Development: General; Technological Change; Research and Development; Intellectual Property Rights: General; Regional Economic Activity: Growth, Development, Environmental Issues, and Changes; Size and Spatial Distributions of Regional Economic Activity;
    JEL: O10 O30 R11 R12
    Date: 2014
  13. By: Andrei S. Akhremenko (National Research University Higher School of Economics); Alexander Petrov (National Research University Higher School of Economics)
    Abstract: The main focus of this paper is the impact of efficiency losses, related to public capital stock, on the prospects of economic growth in democratic and autocratic political environments. We introduce a distinction between two types of efficiency loss: along with the loss of public capital during its accumulation, we take into account the process of capital stock depreciation. We demonstrate that the decrease in efficiency of any type makes the probability of long-run growth higher for autocracies; however, in the presence of high efficiency, democracies tend to perform better. The results were obtained by formal analysis and computational experiments, realized on the basis of an original dynamical model.
    Keywords: dynamical formal model, policy space, democracy, autocracy, economic growth, efficiency, public capital
    JEL: C02 P16 Z18
    Date: 2014
  14. By: Marc Badia-Miró (Facultat d'Economia i Empresa; Universitat de Barcelona (UB)); Cristián A. Ducoing
    Abstract: This chapter analyses the effects of Natural Resources on the Chilean economy in the long run (1850 - 1950). Specifically, the authors focus their attention on the mining cycles (nitrates and copper) and their impact on the mining activity. We also compare it with the evolution of the industry and whole economy, and how this has affected the economic growth of the country. In that sense, the industrial performance in Chile at the end of the 19th century until the Great Depression is still under debate. The optimistic view of Kirsch (1977) forehead the pessimistic view of Lagos (1966) and Palma (1979). The new data and its analyses shows a neutral effect of the Natural Resources in the industrial development.
    Keywords: Natural Resources, Dutch Disease, Chile, Industrialization.
    JEL: N56 Q33 Q37
    Date: 2014
  15. By: Sefa Awaworyi; Siew Ling Yew
    Abstract: Using a sample of 243 meta-observations drawn from 42 primary studies, this paper conducts a metaanalysis of the empirical literature that examines the impact of military expenditure on economic growth. We find that existing studies indicate growth-retarding effects of military expenditure. The results from the meta-regression analysis suggest that the effect size estimate is strongly influenced by study variations. Specifically, we find that underlying theoretical models, econometric specifications, and data type as well as data period are relevant factors that explain the heterogeneity in the military expenditure-growth literature. Results also show that positive effects of military expenditure on growth are more pronounced for developed countries than less developed countries.
    Date: 2014–09
  16. By: Andrew T. Young (West Virginia University, College of Business and Economics); Matthew J. Higgins (Georgia Institute of Technology & NBER); Donald J. Lacombe (West Virginia University, College of Business and Economics); Briana Sell (Georgia Institute of Technology)
    Abstract: Conventional wisdom suggests that small businesses are innovative engines of Schumpetarian growth. However, as small businesses, they are likely to face credit rationing in financial markets. If true then policies that promote lending to small businesses may yield substantial economy-wide returns. We examine the relationship between Small Business Administration (SBA) lending and local economic growth using a spatial econometric framework and a sample of 3,035 U.S. counties for the years 1980 to 2009. We find evidence that a county’s SBA lending per capita is associated with direct negative effects on its income growth. We also find evidence of indirect negative effects on the growth rates of neighboring counties. Overall, a 10% increase in SBA loans per capita is associated with a cumulative decrease in income growth rates of about 2%.
    Keywords: Small Business Administration, guaranteed loans, economic growth, income growth, entrepreneurship, US counties, spatial econometrics, spillovers
    JEL: O47 E65 R11 H25 C23
    Date: 2014–12
  17. By: Sefa Awaworyi; Siew Ling Yew
    Abstract: This paper investigates how government transfers affect economic growth. Using meta-analysis techniques, we systematically review 24 primary studies with 164 estimates that examine the effect of government transfers on economic growth. After addressing heterogeneity and issues of publication bias in the existing literature, we find a negative association between government transfers and growth. This negative growth impact of government transfers also holds for developed countries. Meta-regression results also reveal that the effect size of reported estimates largely depends on individual study characteristics. In particular, data time period, measure of government transfers, econometric specification and underlying theoretical models are important factors that explain the variations in the empirical results.
    Keywords: Transfers; Welfare policy; Social security; Taxes; Economic growth
    JEL: I38 H53 H55 O47 E62
    Date: 2014–09
  18. By: Dorosh, Paul A.; Thurlow, James
    Abstract: The development debate in Africa south of the Sahara is often cast as “agriculture versus nonagriculture.†Yet this view overlooks the heterogeneity within these broad sectors and the synergies between them. We estimate sectoral poverty–growth elasticities using economywide models for five African countries. Our detailed treatment of nonagriculture complements an expanding literature disaggregating the growth–poverty relationship in agriculture. Although our estimated elasticities are higher for agriculture given the importance of farm incomes for the poor, the extent to which this is true varies by country. In fact, elasticities for certain nonagricultural sectors are much closer to those in agriculture. Overall, elasticities are typically higher for trade and transport services and manufacturing (agroprocessing).
    Keywords: economic growth, Agriculture, Agricultural policies, agricultural sector, Industrial sector, transportation, economic sectors, Poverty, income, poverty alleviation, economywide model, elasticity, nonagriculture, time allocation,
    Date: 2014
  19. By: Diao, Xinshen; McMillan, Margaret S.
    Abstract: Africa’s recent economic growth is at a historical high, the patterns associated with this growth appear to be quite different from the Asian experiences where rapid growth was fueled by labor intensive, export-oriented manufacturing. Because this pattern differs with our typical view of structural transformation, a heated debate has begun over the sustainability of Africa’s growth. In our view, Africa’s recent growth is still not well understood and thus it is difficult to say much that is meaningful about future prospects for growth on the continent. Against this background, we adapt Lewis’s (1954) dual-economy model to the economies of Africa to better understand the role that the “in-between†sector as defined by Lewis (1979) has played in Africa’s recent growth. Our framework incorporates the coexistence of a closed and an open modern economy and takes into account the diversity and heterogeneity of the activities that characterize modern African economies.
    Keywords: economic growth, Economic development, Mathematical models, structural change, economic models,
    Date: 2014

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