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on Economic Growth |
| By: | Oded Galor; Marc Klemp |
| Abstract: | This research explores the origins of the variation in the prevalence and nature of political institutions across globe. It advances the hypothesis and establishes empirically that variation in the inherent diversity across human societies, as determined in the course of the exodus of Homo sapiens from Africa tens of thousands of years ago, shaped the nature of political institutions across regions and societies. The study establishes that, while human diversity has amplified the beneficial e?ects of institutions, mitigating the adverse e?ects of non-cohesiveness, its simultaneous contribution to heterogeneity in cognitive and physical traits has fostered the scope for domination, leading to the formation and persistence of autocratic institutions. A larger degree of human diversity within societies diminished cohesiveness and therefore stimulated the emergence of institutions that have mitigated the adverse e?ects of non-cohesiveness on productivity. However, the dual impact of human diversity on the emergence of inequality and class stratification have diverted the nature of the emerging institutions towards extractive, autocratic ones. Developing a novel geo-referenced dataset of genetic diversity and ethnographic characteristics among ethnic groups across the globe, the analysis establishes that genetic diversity contributed to the emergence of autocratic pre-colonial institutions. Moreover, the findings suggest that the contribution of diversity to these pre-colonial autocratic institutions has plausibly operated through its dual e?ect on the formation of institutions and class stratification. Furthermore, reflecting the persistence of institutional, cultural, and genetic characteristics, the spatial distribution of genetic diversity across the globe has contributed to the contemporary variation in the degree of autocracy across countries. |
| Keywords: | Autocracy, Economic Growth, Genetic Diversity, Institutions, Out-of-Africa Hypothesis of Comparative Development |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2015-7&r=all |
| By: | Filipe Campante; Davin Chor |
| Abstract: | We provide evidence that economic circumstances are a key intermediating variable for understanding the relationship between schooling and political protest. Using the World Values Survey, we find that individuals with higher levels of schooling, but whose income outcomes fall short of that predicted by their biographical characteristics, in turn display a greater propensity to engage in protest activities. We discuss a number of interpretations that are consistent with this finding, including the idea that economic conditions can affect how individuals trade off the use of their human capital between production and political activities. Our results could also reflect a link between education, ?grievance?, and political protest, although we argue that this is unlikely to be the sole explanation. Separately, we show that the interaction between schooling and economic conditions matters too at the country level: Rising education levels coupled with macroeconomic weakness are associated with increased incumbent turnover, as well as subsequent pressures toward democratization. |
| URL: | http://d.repec.org/n?u=RePEc:qsh:wpaper:248176&r=all |
| By: | Pei Kuang; Kaushik Mitra |
| Abstract: | A model of business cycles in which households do not have knowledge of the long-run growth of endogenous variables and continually learn about this growth is presented. The model features comovement and mutual reinforcement of households' growth expectations and market outcomes and suggests a critical role for shifting long-run growth expectations in business cycle fluctuations. There are important implications for estimating the output gap and the derived cyclically-adjusted fiscal budget balance computed by policy making institutions. |
| Keywords: | Trend, Expectations, Business Cycle, Output Gap, Cyclically-Adjusted Budget Balance |
| JEL: | E32 E62 D84 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:bir:birmec:15-13&r=all |
| By: | Kris Inwood; Hamish Maxwell-Stewart; Deb Oxley |
| Abstract: | The earliest measures of well-being for Europeans born in the Pacific region are heights and wages in Tasmania. Evidence of rising stature survives multiple checks for measurement, compositional and selection bias. The challenges to health and stature seen in other nineteenth-century settler societies (the ‘antebellum paradox’) are not visible here. There was a strong correlation in Tasmania between stature and per capita GDP. We sketch an interpretation highlighting the role of relatively slow population growth and urbanization, a decline in food cost per family member available from a worker’s wage, and early recognition of the importance of public health. |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:auu:hpaper:038&r=all |
| By: | Maxime Menuet (LEO - Laboratoire d'Economie d'Orléans - CNRS - Université d'Orléans); Patrick Villieu (LEO - Laboratoire d'Economie d'Orléans - CNRS - Université d'Orléans) |
| Abstract: | The vampire metaphor has been used in numerous papers describing biological interactions between two populations. Such a metaphor translates well to a standard endogenous growth model with public debt. Public debt can be assimilated to a Vamp, whose blood-sucking behavior corresponds to the harmful effect of the debt burden on productive public expenditures. However, the complete destruction of public debt in the long-run is shown to be socially undesirable, because this would imply too much distortionary taxation, with damaging effects on the balanced growth path. By identifying ecological or biological processes with usual national account relationships, this analysis is one step further in the integration of macroeconomics and environmental economics. |
| Keywords: | public debt,vampire,ecological process |
| Date: | 2015–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01199770&r=all |
| By: | Dirk Ulbricht; Dmitry Chervyakov |
| Abstract: | The latest long-term projection of Germany’s population implies a clear trend: even though slight growth is expected over the next decade, a decline in the future is almost inevitable. Furthermore, an ageing society combined with a low fertility rate will lead to massive shrinkage of the working-age population. What are the social and economic consequences of these developments? Is a decline in economic growth unavoidable? We present the results of the long-term population projection and summarize the various effects population ageing may have on Germany. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwrup:78en&r=all |
| By: | Göksu Aslan (University of Messina) |
| Abstract: | In this paper, redistribution and inequality impact on economic growth are observed for the countries in the panel framework approach, to the extent of their economic freedom score. There exists a growing research interest on inequality and economic growth relationships in the global level. On the other hand, redistributive policies and their effects are highly controversial since some views cover that the interventions for equality may have negative effects on economic growth. I apply system GMM estimation on a dynamic panel model as to test inequality and redistribution effects on economic growth and compare with ordinary least squares, within group and difference GMM estimations. Dataset includes annual observations from 1995 to 2011 for 141 countries. According to the SYS-GMM estimation results, for economically free countries, both net inequality and redistribution have negative impact on economic growth . The impact of net inequality is absolutely higher than impact of redistribution. For economically unfree countries, net inequality has positive significant effect, while redistribution has negative significant effect which is very low. |
| Keywords: | Economic growth, GDP, GMM, inequality, redistribution, economic freedom |
| JEL: | O40 C23 E62 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:2705203&r=all |
| By: | Alexander Chudik; Kamiar Mohaddes; M. Hashem Pesaran; Mehdi Raissi |
| Abstract: | This paper studies the long-run impact of public debt expansion on economic growth and investigates whether the debt-growth relation varies with the level of indebtedness. Our contribution is both theoretical and empirical. On the theoretical side, we develop tests for threshold effects in the context of dynamic heterogeneous panel data models with cross-sectionally dependent errors and illustrate, by means of Monte Carlo experiments, that they perform well in small samples. On the empirical side, using data on a sample of 40 countries (grouped into advanced and developing) over the 1965- 2010 period, we find no evidence for a universally applicable threshold effect in the relationship between public debt and economic growth, once we account for the impact of global factors and their spillover effects. Regardless of the threshold, however, we find significant negative long-run effects of public debt build-up on output growth. Provided that public debt is on a downward trajectory, a country with a high level of debt can grow just as fast as its peers in the long run. |
| Date: | 2015–09–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:15/197&r=all |
| By: | Shafi, Maryam; Asghar, Zahid |
| Abstract: | The present study explores the impact of tax policy on economic growth using average marginal tax rate and average tax rate for South Asian countries. The data for five developing countries: India, Maldives, Nepal, Pakistan, Sri-Lanka is used for the period of 1991-2010. This study uses Additive Mixed Models with penalized spline methodology. In this study we have constructed the average marginal tax rates using methodology of Seater (1982). It further identifies that the variables like average marginal tax rate (AMTRs), average tax rate (ATR), population growth rate, trade-openness, investment, human capital and real per capita GDP are the significant determinants of economic growth in the sample countries. On average, AMTRs and population growth rate reduce the performance of economic growth in the developing countries. The main findings further suggest that nonlinear effects are exerted by tax policy on economic growth. The increase in average marginal tax rate at the lower level of taxation, effects more adversely, than at higher levels of taxation. So it suggested that to increase the economic growth a substantial tax cut in prevailing tax level is essential in developing countries. As in developing countries the AMTRs affects the economic growth adversely and significantly, so developing countries should introduce tax reforms in a way that will lead to reduce dependence on AMTRs. |
| Keywords: | Tax Policy, Economic Growth, Semi-Parametric Method, Pakistan, Sri-Lanka, Nepal, India, Maldives, Average Marginal Tax Rate (AMTR) |
| JEL: | C1 H2 H30 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:66662&r=all |
| By: | Elmawazini, Khaled; Khiyar, Khiyar Abdalla; Al Galfy, Ahmad; Aydilek, Asiye |
| Abstract: | There is mixed support for the hypothesis that the banking sector is a channel for economic growth. While most studies on economic growth in Gulf Cooperation Council (GCC) countries have not distinguished between conventional banks and Islamic banks, this study contributes to the empirical literature by comparing the respective impacts of Islamic banks and commercial banks on economic growth among GCC countries during the period 2001-2009, bringing out policy implications. The main result of panel data regressions is that both conventional and Islamic banks have fuelled economic growth, with the latter having a more significant impact. These results contradict the findings of some single-country studies that have examined the impact of Islamic banking on economic growth. |
| Keywords: | Finance,Economic growth,Dynamic panel data models,GCC countries |
| JEL: | C2 G21 O53 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201561&r=all |
| By: | Simplice Asongu (Yaoundé/Cameroun); Ghassen El Montasser (University of Manouba, Tunisia); Hassen Toumi (University of Sfax, Tunisia) |
| Abstract: | This study complements existing literature by examining the nexus between energy consumption (EC), CO2 emissions (CE) and economic growth (GDP) in 24 African countries using a panel ARDL approach. The following findings are established. First, there is a long run relationship between EC, CE and GDP. Second, a long term effect from CE to GDP and EC is apparent, with reciprocal paths. Third, the error correction mechanisms are consistently stable. However, in cases of disequilibrium only EC can be significantly adjusted to its long run relationship. Fourth, there is a long-run causality running from GDP and CE to EC. Fifth, we find causality running from either CE or both CE and EC to GDP and inverse causal paths are observable. Causality from EC to GDP is not strong, which supports the conservative hypothesis. Sixth, the causal direction from EC to GDP remains unobservable in the short term. By contrast, the opposite path is observable. There are also no short-run causalities from GDP, or EC, or EC and GDP to EC. Policy implications are discussed. |
| Keywords: | Energy consumption; CO2 emissions; Economic growth; Africa |
| JEL: | C52 O40 O55 Q43 Q50 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:15/037&r=all |
| By: | Maxime Menuet (LEO - Laboratoire d'Economie d'Orléans - CNRS - Université d'Orléans); Alexandru Minea (CERDI - Centre d'études et de recherches sur le developpement international - CNRS - Université d'Auvergne - Clermont-Ferrand I); Patrick Villieu (LEO - Laboratoire d'Economie d'Orléans - CNRS - Université d'Orléans) |
| Abstract: | In response to the Great Recession, Central Banks around the world adopted " unconven-tional " monetary policies. In particular, the Fed, and more recently the ECB, launched massive debt monetization programs. In this paper, we develop a formal analysis of the short-and long-run consequences of deficit and debt monetization, through an endoge-nous growth model in which economic growth interacts with productive public expenditure. This interaction can generate two positive balanced growth paths (BGP) in the long-run: a high BGP and a low BGP, and further, depending on the form of the CIA constraint, possible multiplicity and indeterminacy. Thus, monetizing deficits is found to be remarkably powerful. First, a large dose of monetization might allow avoiding, whenever present, BGP indeterminacy. Second, monetization always allows increasing growth and welfare along the (high) BGP, by weakening the debt burden in the long-run. Third, with a CIA on consumption only, monetization provides a rationale for deficits in the long-run: for high degrees of monetization, the impact of deficits and debts on economic growth and welfare becomes positive in the steady-state. |
| Keywords: | public debt, indeterminacy, monetization, economic growth |
| Date: | 2015–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01199774&r=all |
| By: | Raouf Boucekkine (GREQAM, Aix Marseille University); Patrick Pintus (GREQAM, Aix Marseille University); Benteng Zou (CREA, Université de Luxembourg) |
| Abstract: | We examine the issue of stability of stochastic endogenous growth. First, stochastic stability concepts are introduced and applied to stochastic linear homogenous differen- tial equations to which several stochastic endogenous growth models reduce. Second, we apply the mathematical theory to two models, starting with the stochastic AK model. It’s shown that in this case exponential balanced paths, which characterize optimal trajectories in the absence of uncertainty, are not robust to uncertainty: the economy may almost surely collapse at exponential speed even though productivity is initially arbitrarily high. Finally, we revisit the seminal global diversification endogenous growth model (Obstfeld, 1994): taking into account stochastic stability calls for a redefinition of the mean growth concept, which leads to revisit the established wisdom on the growth effect of global diversification. |
| Keywords: | Endogenous growth, stochastic growth, stochastic stability, AK model, Global diversification |
| JEL: | O40 C61 C62 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:15-09&r=all |
| By: | Ron W. Nielsen |
| Abstract: | Historical economic growth is analysed using the method of reciprocal values. Included in the analysis is the world and regional economic growth. The analysis demonstrates that the natural tendency for the historical economic growth was to increase hyperbolically. |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1509.06612&r=all |