nep-gro New Economics Papers
on Economic Growth
Issue of 2015‒01‒31
twelve papers chosen by
Marc Klemp
Brown University

  1. The Relationship Between Novelty-Seeking Traits and Comparative Economic Development By Erkan Gören
  2. Fertility rebound and economic growth. New evidence for 18 countries over the period 1970-2011 By Piotr Dominiak, ; Ewa Lechman ; Piotr Anna Okonowicz
  3. Labor Productivity Growth: Disentangling Technology and Capital Accumulation By Michele Battisti ; Massimo Del Gatto ; Christopher F. Parmeter
  4. Knowledge, Human Capital and Economic Development: Evidence from the British Industrial Revolution, 1750-1930 By B. Zorina Khan
  5. Globalization and Growth By Gene M. Grossman ; Elhanan Helpman
  6. Industrialization: Why Britain Got There First By Nicholas Crafts
  7. Technology and Geography in the Second Industrial Revolution: New Evidence from the Margins of Trade By Michael Huberman ; Christopher M. Meissner ; Kim Oosterlinck
  8. The Danish Agricultural Revolution in an Energy Perspective: A Case of Development with Few Domestic Energy Sources By Henriques, Sofia Teives ; Sharp, Paul
  9. Intergenerational Politics, Government Debt, and Economic Growth By Tetsuo Ono
  10. Long-run effects of democracy on income inequality : evidence from repeated cross-sections By Balcazar, Carlos Felipe
  11. Effects of intellectual property rights protection and integration on economic growth and welfare By Lai, Chung-hui ; Wang, Vey
  12. Development theory and poverty. A review By Francesco Farina

  1. By: Erkan Gören (University of Oldenburg, Department of Economics )
    Abstract: This paper suggests a theoretical framework and provides empirical evidence for a hump-shaped relationship between the fraction of novelty-seeking traits in society and current levels of per capita income. The hypothesis is that novelty-seeking traits produce two countervailing effects on aggregate productivity and hence economic development. The beneficial effect consists in explorative knowledge acquisition, which contributes significantly to the process of economic development. The detrimental effect results from a certain amount of this knowledge not being used reliably for capital accumulation due to the high fraction of individuals engaged in exploration rather than in production. One main conclusion of the empirical analysis is that the high fraction of novelty-seeking individuals in society engaged in short-run explorative knowledge acquisition prevent permanent settlement and therefore act as an obstacle to the development of centralized states, which are a precursor to modern industrial production.
    Keywords: Novelty-Seeking Behavior, Entrepreneurial Traits, Economic Development, Natural Selection, Genetic Diversity
    JEL: N50 O10 O50 Z10
    Date: 2015–01
  2. By: Piotr Dominiak, (Gdansk University of Technology, Poland ); Ewa Lechman (Gdansk University of Technology, Poland ); Piotr Anna Okonowicz (Gdansk University of Technology, Poland )
    Abstract: Long-run impact of economic growth on fertility trends is ambiguous and sensitive for in-time variations. Noticeably, over last decades, economic growth has led in many countries to significant falls in total fertility rates. However, recently, in high-income economies a kind of ‘fertility rebound’ emerged (Goldstein, 2009; Luci and Thevenon, 2011; Day, 2012), which supports the hypothesis that reversal trends in total fertility rates are mainly attributed to economic growth. The paper unveils the relationship between total fertility rate changes and economic growth in 18 selected countries with fertility rebound observed, over the period 1970-2011, and detects the GDP-threshold at which the fertility rebound emerged. To report on the relationship we deploy longitudinal data analysis assuming non-linearity between examined variables. Data applied are exclusive derived from World Development Indicators 2013. Our main findings support the hypothesis on U-shaped relationship between total fertility rate and economic growth in analyzed countries in 1970-2011. Along with the previous we project the minimum level of GDP per capita (GDP-threshold) when the fertility rebound takes place.
    Keywords: fertility rate, fertility rebound, economic growth, panel data analysis.
    JEL: J11 O10 C23
    Date: 2014–12
  3. By: Michele Battisti (University of Palermo, CeLEG LUISS Guido Carli and RCEA ); Massimo Del Gatto (G.d'Annunzio University and CRENoS ); Christopher F. Parmeter (Department of Economics, University of Miami )
    Abstract: We adopt a counterfactual approach to decompose labor productivity growth into growth of Technological Productivity (TEP), growth of the capital-labor ratio and growth of Total Factor Productivity (TFP). We bring the decomposition to the data using international countrysectoral information spanning from the 1960s to the 2000s and a nonparametric generalized kernel method, which enables us to estimate the production function allowing for heterogeneity across all relevant dimensions: countries, sectors and time. As well as documenting substantial heterogeneity across countries and sectors, we nd average TEP to account for about 44% of labor productivity growth and TEP gaps with respect to the US to remain almost unchanged, on average, despite an average 1% yearly decrease in the labor productivity gap. The US displays the highest TEP growth rate. We then perform standard convergence regressions nding strong evidence of technological convergence and showing that the eect of a few variables only, among those found significant to explain labor productivity convergence, occurs through the technology channel.
    Keywords: TFP, Aggregate Productivity, Technology, Nonparametric Estimation, Convergence Publication Status: Under Review
    JEL: C14 D24 O41 O47
    Date: 2014–09–30
  4. By: B. Zorina Khan
    Abstract: Endogenous growth models raise fundamental questions about the nature of human creativity, and the sorts of resources, skills, and knowledge inputs that shift the frontier of technology and production possibilities. Many argue that the nature of early British industrialization supports the thesis that economic advances depend on specialized scientific training or the acquisition of costly human capital. This paper examines the contributions of different types of knowledge to British industrialization, by assessing the backgrounds, education and inventive activity of the major contributors to technological advances in Britain during the crucial period between 1750 and 1930. The results indicate that scientists, engineers or technicians were not well-represented among the British great inventors until very late in the nineteenth century. Instead, important discoveries and British industrial advances were achieved by individuals who exercised commonplace skills and entrepreneurial abilities to resolve perceived industrial problems. For developing countries today, the implications are that costly investments in specialized human capital resources might be less important than incentives for creativity, flexibility, and the ability to make incremental adjustments that can transform existing technologies into inventions that are appropriate for prevailing domestic conditions.
    JEL: J24 N13 O14 O3 O31 O34
    Date: 2015–01
  5. By: Gene M. Grossman ; Elhanan Helpman
    Date: 2014–01
  6. By: Nicholas Crafts (The University of Warwick )
    Abstract: This paper provides an introductory overview of the British Industrial Revolution. The dimensions of growth are discussed as well as notable recent explanations for Britain’s primacy. Obstacles to faster growth are considered as well as advantages that were conducive to stronger TFP growth. In this context, reasons for the long delay before steam power had any significant impact on productivity are highlighted. Some implications of Britain’s early start to modern economic growth for subsequent economic performance are noted. The paper concludes that precocious British industrialization is much easier to explain than the timing of the acceleration of technological progress.
    Keywords: industrialization; invention; industrial revolution; TFP growth
    Date: 2014
  7. By: Michael Huberman ; Christopher M. Meissner ; Kim Oosterlinck
    Abstract: In the Belle Époque, Belgium recorded an unprecedented trade boom, but growth in output per capita was lackluster. We seek to reconcile this ostensible paradox. Because of the sharp decline in both fixed and variable trade costs, the trade boom was as much about the expansion in the number of products delivered and markets served as it was about shipping more of the same old products. We use a new highly disaggregated data set on bilateral exports at the product level to illustrate these claims. In line with new trade theory, the effect of trade on productivity was mediated by sector-level firm heterogeneity and product differentiation. In new technology sectors, like tramways, the high degree of firm heterogeneity amplified the effect of trade on productivity. But in other sectors, mainly old staple industries like cotton textiles, a high level of firm uniformity muted the effect of trade. Into the twentieth century, old staples trumped new technology sectors, per capita income growing modestly as a result.
    JEL: F14 F15 N73
    Date: 2015–01
  8. By: Henriques, Sofia Teives (University of Southern Denmark ); Sharp, Paul (University of Southern Denmark )
    Abstract: We examine the case of Denmark - a country which historically had next to no domestic energy resources - for which we present new historical energy accounts for the years 1800-1913. We demonstrate that Denmark’s take off at the end of the nineteenth century was relatively energy dependent. We relate this to her well-known agricultural transformation and development through the dairy industry, and thus complement the literature which argues that expensive energy hindered industrialization, by arguing that similar obstacles would have precluded other countries from a more agriculture-based growth. The Danish cooperative creameries, which spread throughout the country over the last two decades of the nineteenth century, were dependent on coal. Although Denmark had next to no domestic coal deposits, we demonstrate that her geography allowed cheap availability throughout the country through imports. On top of this we emphasize that another important source of energy was imported feed for the cows.
    Keywords: Coal, Denmark, energy transition, agriculture
    Date: 2015
  9. By: Tetsuo Ono (Graduate School of Economics, Osaka University )
    Abstract: This study presents a two-period overlapping-generations model featuring en- dogenous growth and intergenerational conflict over fiscal policy. In particular, we characterize a Markov-perfect political equilibrium of the voting game between gen- erations, and show the following results. First, population aging incentivizes the government to invest more in capital for future public spending, and thus produces a positive effect on economic growth. Second, when the government finances its spending by issuing bonds, an introduction of a balanced budget rule results in a higher growth rate. Third, to obtain a normative implication of the political equi- librium, we compare it to an allocation chosen by a benevolent planner who takes care of all future generations. Here, we show that the political equilibrium attains a lower growth rate than that in the planner's allocation.
    Keywords: Economic Growth; Government Debt; Overlapping Generations; Pop- ulation Aging; Voting
    JEL: D72 D91 H63
    Date: 2014–06
  10. By: Balcazar, Carlos Felipe
    Abstract: This paper assesses the link between democracy and inequality. Inequality is measured at the cohort level with pseudo-panel data built from nine Latin American countries'household surveys (1995-2009, biannual). Democracy is measured as a stock during long periods of time both before and after each cohort's year of birth. The paper presents evidence that long-run historical patterns in the degree of democracy relate to income inequality. However, this relationship is non-monotonic: inequality ?rst increases with the stock of democracy before falling. The paper also presents evidence that education may be a mechanism explaining this result.
    Keywords: Parliamentary Government,Population Policies,Labor Policies,Inequality,Political Economy
    Date: 2015–01–01
  11. By: Lai, Chung-hui ; Wang, Vey
    Abstract: The protection of intellectual property rights (IPR) and the distribution of rent are central issues in R&D-based growth models with the return to innovation serving as the engine of growth. In this paper the authors consider the strength of the intellectual property rights and franchise bargaining system to analyze how the rent/franchise fee and institutional quality affect the economic growth and social welfare. It is found that the intermediate good firm with full IPR protection charges a price equal to the marginal cost. In addition, if imitated technologies exhibit a labor spillover effect, decreasing the IPR protection will increase the rent/franchise fee. The authors also show that the growth-maximizing effects of IPR protection, the bargaining power of intermediate goods firms, and the imitation of technology are no longer equivalent to those effects on welfare-maximization since the welfare result depends on the relative degrees of the growth enhancing effect and crowding-out effect on production.
    Keywords: IPR,R&D,bargaining,endogenous growth,social welfare
    JEL: L11 O40 O30
    Date: 2015
  12. By: Francesco Farina (University of Siena )
    Abstract: This review article presents the evolution of development theory during the XX century, the measurement of poverty, the concept and the indices of multidimensional poverty. A special focus concerns the complex linkages between income inequality, poverty and institutions during the growth process of developing countries.
    Keywords: Development theory,Growth,Poverty,Income inequality
    JEL: I31 I32 O15 O21 O43
    Date: 2015–01

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