nep-gro New Economics Papers
on Economic Growth
Issue of 2015‒08‒07
six papers chosen by
Marc Klemp
Brown University

  1. The Neolithic Revolution and Human Societies: Diverse Origins and Development Paths By Svizzero, Serge; Tisdell, Clem
  2. Paternalism, Cultural Transmission and Diffusion on Complex Networks By Panebianco, Fabrizio; Verdier, Thierry
  3. The Collapse of Some Ancient Societies Due to Unsustainable Mining Development (A Draft) By Tisdell, Clem; Svizzero, Serge
  4. The impact of government size on economic growth: a threshold analysis By Stylianos Asimakopoulos; Yiannis Karavias
  5. Energy Subsidies, Public Investment and Endogenous Growth By Mundaca, Gabriela
  6. Theories about the Commencement of Agriculture in Prehistoric Societies: A Critical Evaluation By Svizzero, Serge; Tisdell, Clem

  1. By: Svizzero, Serge; Tisdell, Clem
    Abstract: Many economists have recently tried to explain the diverse levels of economic development of countries by studying their trajectories during past eras and in recent history. Special attention has been given to the influences on contemporary societies of relevant developments in prehistory and more particularly, those arising from the Neolithic revolution, i.e. the transition from foraging to farming. This transition from simple to complex hunting and gathering and then to farming is a sequence couched in social evolutionary terms. It suggests a pattern of progressive development resulting in increasing cultural complexity. In this evolutionary scheme, simple hunter-gatherers develop into complex hunters and collectors, whose critical economic decisions are a consequence of climatic changes that inevitably lead them to irreversibly adopt agriculture. Although this pattern of development is widely accepted, we challenge it. Studies of past and recent hunting and gathering societies show an incredible diversity of human social organization through time. Similarly, the various centers where agriculture started during the Neolithic period display great diversity in terms of their genesis, nature and consequences. The nature of the spread of agriculture from the Levant to Europe displays diversity. Demic diffusion and cultural diffusion were both present, and generated a variety of diffusion processes. This diversity of human societies is not easily accounted for by social evolutionary processes; indeed, people’s understanding of the world directly influences the economic decisions they make. The development of agriculture eventually generated an economic surplus. This (combined with increasing social and economic inequalities), another feature of the Neolithic revolution, led to economic growth and therefore to the long-term dominance of agropastoralists societies. Inequality (the appropriation by dominant classes of the economic surplus generated by agropastoralism and by stemming economic developments) was therefore a necessary early condition for increasing the chances of the survival and development of these societies; otherwise they would all have been caught in the Malthusian trap.
    Keywords: hunter-gatherers, agriculture, Neolithic transition, demic diffusion, imitation, economic surplus, social and economic inequalities, social evolutionary theory., Community/Rural/Urban Development, Crop Production/Industries, Land Economics/Use, N00, N5, O10, Q10,
    Date: 2014–04
  2. By: Panebianco, Fabrizio; Verdier, Thierry
    Abstract: We study cultural diffusion in a complex network where the transition probabilities are determined by a cultural transmission technology with endogenous vertical transmission rates (a la Bisin and Verdier, 2001). We derive a two-way epidemic model in which both the infection and the recovery rates are endogenous and depend on the topology of the network. First, we identify a "social structure bias" in cultural transmission that determines the direction of cultural change relating the economic structure of parental socialization incentives to the social network structure. Second, we characterize two balancing conditions satisfied by the network degree distribution and the vertical transmission rate distribution to ensure the sustainability of long run cultural heterogeneity. Third, we show how paternalistic motivations for endogenous cultural transmission interact with the "social structure bias" channel and maintain steady state cultural diversity for any network structure.
    Keywords: cultural transmission; diffusion; mean-field; social networks
    JEL: C73 L14 O33
    Date: 2015–07
  3. By: Tisdell, Clem; Svizzero, Serge
    Abstract: The literature explaining social collapse mainly focuses on factors such as wars, climate change or disease, as exemplified by numerous examples of collapses which have occurred during the Late Bronze Age in the Near East and in the South-eastern Mediterranean region. This paper aims at demonstrating that collapse can also have economic reasons. Indeed, collapse may be the outcome of an economic growth process which is inherently unsustainable. More precisely, we claim that several ancient societies collapsed because the form of economic development which they relied on eventually proved to be unable to sustain their standard of living. It is believed that the Únĕtice societies – central European Early Bronze Age - were among those that collapsed for that reason. A simple model is presented to demonstrate that, in this agricultural economy, the introduction of bronze mining and metallurgy led to unsustainable development and its subsequent collapse.
    Keywords: unsustainable development, Bronze Age, elite, economic surplus, mining productivity., Community/Rural/Urban Development, Research and Development/Tech Change/Emerging Technologies, N53, Q33, O13, E30,
    Date: 2015–04–27
  4. By: Stylianos Asimakopoulos; Yiannis Karavias
    Abstract: This paper examines the nature of the relationship between government size and economic growth and identifies the optimal level of government size through a novel and very general non-linear panel Generalized Method of Moments approach. Using a large panel dataset we uncover a statistically significant non-linear relationship via identifying the optimal threshold of government spending that maximizes growth. Furthermore, we show that the relationship between the two variables above and below that optimal level is statistically significant, even if we split our sample to developed and developing countries. Finally, we fi?nd an asymmetric impact of government size on economic growth in developed and developing countries around the estimated threshold.
    Keywords: government size, economic growth, dynamic threshold estimation JEL Classification: E62, C23, O11, O50
  5. By: Mundaca, Gabriela
    Abstract: This paper deals with impacts of fossil fuel subsidy reform on economic growth, focusing mostly on the countries of the Middle East and East Africa (MENA) region. We first develop a theoretical growth model, and use it to demonstrate that a country can achieve higher levels of economic growth if the government reduces its energy subsidies. Our empirical work confirms the main results from the theoretical model. That is, a country that initially subsidizes its fossil fuels, and then eliminates or reduces these subsidies, will as a result experience higher economic GDP per capita growth, higher employment, and greater levels of labor force participation, especially among the youth. These effects are strongest in countries where fuel subsidies are generally high, such as those in the MENA Region. We here predict that for a given level of subsidy, a 20 cents average increase in the gasoline and diesel price per liter can increase the GDP per capita growth rate by about 0.46 percent and 0.24 percent, respectively. In the MENA countries, savings in subsidies seem to be earmarked by the region’s governments to health expenditures, education expenditures and public investment in infrastructure. These channels appear to be strong contributing factors to higher long-run growth when fuel subsidies are reduced.
    Keywords: energy subsidies, economic growth, public investment
    JEL: Q3 Q4 Q43 Q48
    Date: 2015–07–16
  6. By: Svizzero, Serge; Tisdell, Clem
    Abstract: The commencement of agriculture in the Holocene era is usually seen as heralding the beginning of a chain of events that eventually resulted in the Industrial Revolution and in modern economic development. The purpose of this paper is to outline and critically review theories about why and how agriculture first began. It also classifies these theories according to whether they are based on agriculture’s development as a response to food deprivation, to a food surplus, or neither of these factors. Because agriculture began independently in several different geographical centres, it seems unlikely that the switch of early societies from hunting and gathering to agriculture was the result of the same cause in all of these locations. Moreover, the paper provides some new suggestions as to why hunters and gatherers were motivated to commence or increase their dependence on agriculture in some locations. Views about the role of natural resources and institutions in the development of agriculture are also discussed.
    Keywords: Agricultural commencement, Domestication, Institutions, Natural endowments, Neolithic transition., Community/Rural/Urban Development, Crop Production/Industries, Land Economics/Use, Research and Development/Tech Change/Emerging Technologies, O1, N00, P00, P52, Z13.,
    Date: 2014–08–30

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