nep-gro New Economics Papers
on Economic Growth
Issue of 2015‒03‒05
six papers chosen by
Marc Klemp
Brown University

  1. Culture, Ethnicity and Diversity By Desmet, Klaus; Ortuño-Ortín, Ignacio; Wacziarg, Romain
  2. Historical trade integration: Globalization and the distance puzzle in the long 20th century By Samuel Standaert; Stijn Ronsse; Benjamin Vandermarliere
  3. Economic Growth and Migration By Jan Ditzen
  4. Stochastic Economic Growth and Volatile Population Dynamics: Past Imperfect and Future Tense. By Tapas Mishra; Claude Diebolt; Mamata Parhi
  5. Benchmarking the Determinants of Economic Growth in Latin America and the Caribbean By Jorge Thompson Araujo; Markus Brueckner; Mateo Clavijo; Ekaterina Vostroknutova; Konstantin M. Wacker
  6. Empirical Analysis of the effect of Human Capital Generation on Economic Growth in India - a Panel Data approach By Debgupta, Sanchari

  1. By: Desmet, Klaus; Ortuño-Ortín, Ignacio; Wacziarg, Romain
    Abstract: We investigate the empirical relationship between ethnicity and culture, defined as a vector of traits reflecting norms, attitudes and preferences. Using surveys of individual values in 76 countries, we find that ethnic identity is a significant predictor of cultural values, yet that within-group variation in culture trumps between-group variation. Thus, in contrast to a commonly held view, ethnic and cultural diversity are unrelated. We explore the correlates of cultural diversity and of the overlap between culture and ethnicity, finding that the level of economic development is positively associated with cultural diversity and negatively associated with the overlap between culture and ethnicity. Finally, although only a small portion of a country's overall cultural heterogeneity occurs between groups, this does not imply that cultural differences between groups are irrelevant. Indeed, we find that civil conflict becomes more likely when there is greater overlap between ethnicity and culture.
    Keywords: between-group diversity; civil conflict; cultural fractionalization; cultural traits; culture; ethnicity; heterogeneity; identity; social norms; within-group diversity
    JEL: D74 J15 P48 Z10
    Date: 2015–03
  2. By: Samuel Standaert; Stijn Ronsse; Benjamin Vandermarliere (-)
    Abstract: This paper studies the structure and the evolution of worldwide trade integration from 1880 up to 1995. Starting from historical trade and GDP data we use a state-space model to construct a bilateral historical trade index. This index is subsequently used to study globalization and the distance puzzle. The increased coverage of this index allows us to expand the period of analysis to include both the first and second globalization waves. We find that the first wave was marked by a strong diversification in the formation of trade links as well as a strong decrease in the effect of distance. The second globalization wave started with a strong decrease in the importance of distance which leveled out in the 1960s. While we do find some evidence of an increase in the importance of distance from the 1960s onwards, this is dwarfed by the strong decrease preceding it.
    Keywords: Trade integration, Globalization, Distance puzzle, State-space
    JEL: F15 C4 F14
    Date: 2014–12
  3. By: Jan Ditzen (Heriot-Watt University)
    Abstract: The literature on growth theory lacks a precise sense of why there are interactions and dependencies between countries. Correspondingly, the spatial econometrics literature on growth empirics accounts for endogenous cross-country interactions, but lacks crucial insights from economic theory as to how such linkages should be precisely modeled. I address this weakness, by proposing a new economic model as a combination of an endogenous Romer-style growth model and a New Economic Geography model. The model admits two distinct sources of interactions between countries: mobility of high skilled workers and inter-country trade. Both of these sources develop from the New Economic Geography models, while the engine of the growth process is adapted from the endogenous growth literature. Motivated by higher wages, highly skilled workers migrate to the richer country, and there they work in the R&D sector. This in turn contributes towards economic growth in the richer country, and leads to divergence between the two countries. Trade in the manufactured good increases the difference between the two countries further. In its focus on both migration of highly skilled labour and its conclusion of divergence, the model captures the phenomenon of the Great Divergence in the 19th century. It is also consistent with evidence of club convergence in the 20th century. The implications of the model are verified by simulation.
    Keywords: Economic growth, New Economic Geography, Cross-country interactions, Convergence, Migration, Trade
    JEL: O41 F22 F43 O31 N10
    Date: 2014
  4. By: Tapas Mishra; Claude Diebolt; Mamata Parhi
    Abstract: We build an analytical model to understand dynamic interlinkage between volatility in economic growth and stochastic demographic dynamics. The time series properties of the model are exploited to offer introspective understanding of the existence of persistence of endogenous and exogenous growth dynamics within our analytical setting. Our research shows that if the economy faces high degree of interdependence between its volatility and stochastic demographic growth in the past with the possibility of slow dissipation of shocks at present, then future economic growth will experience chaotic dynamics. We investigate two possibilities: a process with persistent shocks that can slowly wither away in future, and a jump process that would characterize how economic growth would respond to the arrival of sudden change in demographic system.
    Keywords: Stochastic population, Volatility in economic growth, long-memory, Past dependence, Jump process.
    JEL: O13 O47 C14 C22 J11 D1
    Date: 2015
  5. By: Jorge Thompson Araujo; Markus Brueckner; Mateo Clavijo; Ekaterina Vostroknutova; Konstantin M. Wacker
    Keywords: Poverty Reduction - Achieving Shared Growth Governance - Governance Indicators Economic Theory and Research Macroeconomics and Economic Growth - Economic Conditions and Volatility Macroeconomics and Economic Growth - Economic Growth
    Date: 2014–12
  6. By: Debgupta, Sanchari
    Abstract: Last decade of 20th century faced a strong quest for the determinants of the rate of long run economic growth. Post World War II, human capital has emerged as an important and inevitable factor apart from the other general factors that affect the rate of growth. According to economists and existing theories of growth, a nation that invests in human capital generation should contribute positively in the process of economic growth. Human capital embodies qualities that are inherited as well as acquired through education and training. The returns to investment in human capital not only help individuals to enjoy personal growth but in addition affect the growth of the nation as an aggregate. This paper observes the relationship that prevails between human capital and economic growth in the Indian economy based on NSSO unit level household data. With the help of panel data econometric analysis, the study finds out that human capital generation as an aggregate of average general educational level, literacy rate, per capita educational expenditure and primary enrolment rate, positively impact the per capita net state domestic product, taken as a representative for economic growth.
    Keywords: Human Capital, Economic Growth, Panel Data Econometrics
    JEL: C12 C13 C23
    Date: 2015–02–28

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