nep-gro New Economics Papers
on Economic Growth
Issue of 2016‒03‒06
ten papers chosen by
Marc Klemp
Brown University

  1. Witchcraft Beliefs and the Erosion of Social Capital: Evidence from Sub-Saharan Africa and Beyond By Boris Gershman
  2. The Wild West is Wild: The Homicide Resource Curse By Mathieu Couttenier; Pauline Grosjean; Marc Sangnier
  3. Innovation, Inequality and a Golden Rule for Growth in an Economy with Cobb-Douglas Function and an R&D Sector By Paul J.J. Welfens
  4. Economic Growth and formal learning in the long run By Gianpaolo Mariutti
  5. The economic effects of long-term climate change: evidence from the little ice age By Maria Waldinger
  6. Banking and Industrialization By Stephan Heblich; Alex Trew
  7. The asymmetric effects of monetary policy on housing across the level of development By Juan C. Medina; Robert R. Reed; Ejindu S. Ume
  8. TFP and Intelligence: a cross-national empirical evidence By Evgeniya, Gorlova
  9. Growth Accounting and Endogenous Technical Change By Angus C., Chu; Guido, Cozzi
  10. Cross-Country Output Convergence and Growth: Evidence from Varying Coefficient Nonparametric Method By Li, Kui-Wai; Zhou, Xianbo; Pan, Zhewen

  1. By: Boris Gershman
    Abstract: This paper examines the relationship between witchcraft beliefs, a deep-rooted cultural phenomenon, and various elements of social capital. Using novel survey data from nineteen countries in Sub-Saharan Africa we establish a robust negative association between the prevalence of witchcraft beliefs and multiple measures of trust which holds after accounting for country fixed effects and potential confounding factors at the individual, regional, and ethnic-group levels. This finding extends to other metrics of social capital, namely charitable giving and participation in religious group activities. Such coexistence of witchcraft beliefs and antisocial attitudes stands in stark contrast to a well-explored alternative cultural equilibrium characterized by religious prosociality. Evidence from societies beyond Africa shows that in preindustrial communities where witchcraft is believed to be an important cause of illness, mistrust and other antisocial traits are inculcated since childhood. Furthermore, second-generation immigrants in Europe originating from countries with widespread witchcraft beliefs are generally less trusting.
    Keywords: Culture, Persistence, Social capital, Superstition, Trust, Witchcraft
    JEL: O10 Z10 Z12 Z13
    Date: 2015
  2. By: Mathieu Couttenier (University of Lausanne); Pauline Grosjean (University of New South Wales); Marc Sangnier (AMSE - Aix-Marseille School of Economics - EHESS - École des hautes études en sciences sociales - Centre national de la recherche scientifique (CNRS) - Ecole Centrale Marseille (ECM) - AMU - Aix-Marseille Université)
    Abstract: We document interpersonal violence as a dimension of the resource curse. We rely on a historical natural experiment in the United States, where mineral discoveries occurred sometimes before, sometimes after formal institutions were established in the county of discovery. In places where mineral discoveries occurred before formal institutions were established, there were more homicides per capita historically and the effect has persisted to this day. Today, the share of homicides and assaults explained by the historical circumstances of mineral discoveries is comparable to the effect of education or income. Our results imply that short-term and quasi-exogenous variations in the institutional environment can lead to large and persistent differences in cultural and institutional development.
    Keywords: homicide,resource curse,mineral discoveries,US
    Date: 2016–02
  3. By: Paul J.J. Welfens (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW))
    Abstract: The innovative approach presented introduces a modified neoclassical growth model which includes a new bias of technological progress in a quasi-endogenous growth model in which part of labor is used in the research & development sector. The combination of a macroeconomic production function and a new progress function, plus the assumption that the output elasticity of capital is positively influenced by the size of the R&D sector, sheds new light on innovation and growth as well as income inequality: Thus there is a new approach for explaining Piketty’s historical findings of a medium term rise of the capital income share in industrialized countries – both in the earlier and later part of the 19th century and in 1990-2010. In the approach presented herein, the golden rule issues are also highlighted and it is shown that choosing the right size of the R&D sector will bring about maximum sustainable per capita consumption. While the basic new model is presented for the case of a closed economy, one could easily accommodate both trade and foreign direct investment and thereby get a better understanding of complex international investment, trade and FDI dynamics – including with respect to the envisaged Transatlantic Trade and Investment Partnership.
    Keywords: Innovation, Growth, Inequality, Golden Rule, Piketty
    JEL: O11 O32 O40 D63
    Date: 2015–03
  4. By: Gianpaolo Mariutti (Department of Economics (University of Verona))
    Abstract: This paper gives a statistical account of 19 countries in terms of economic growth ( total and per capita Gdp) and formal learning (literacy rates). The period studied covers almost two centuries from 1820 to 1990. The analysis is made in terms of descriptive statistics and stylized facts.
    Keywords: Economic growth, economic history, human learning
    Date: 2014–12
  5. By: Maria Waldinger
    Abstract: Recent studies have consistently found important economic effects of year-to-year weather fluctuations. This paper studies the economic effects of long-term and gradual climate change, over a period of 250 years, when people have time to adapt. In particular, I study the effects of the Little Ice Age, a historical episode of long-term climate change. Results show significant negative economic effects of long-term climate change. Cities with good access to trade were substantially less affected. Results from yearly historical wheat prices and yield ratios show that temperature change impacted economic growth through its effect on agricultural productivity. Further evidence shows a lack of adaptation. I show evidence of the relevance of these results to the context of contemporary developing countries and recommend ways in which these findings may improve Integrated Assessment Models.
    Date: 2015–10
  6. By: Stephan Heblich (University of Bristol); Alex Trew (University of St. Andrews)
    Abstract: We exploit employment data from 10,528 parishes across nineteenth century England and Wales and find that a one standard deviation increase in finance employment increases the annualized growth rate of secondary labour by 0.8 percentage points. An endogenous growth model with finance and structural transformation motivates the empirical approach. Since initial banking access in 1817 may have been endogenously determined, we use instrumental variables to predict the location of country banks founded before the industrial take-off could possibly be expected. Distance and subsectoral analysis suggest that the effect of finance is highly localized and particularly strong for intermediate secondary sectors.
    Keywords: Banking; industrial revolution; structural transformation; regional economic growth; urbanization.
    JEL: O11 O16 O40 N23 R11
    Date: 2015–09–07
  7. By: Juan C. Medina (Universidad Autónoma de Ciudad Juárez); Robert R. Reed (Universidad de Alabama); Ejindu S. Ume (Universidad de Ohio)
    Abstract: We study the effects of money growth in a neoclassical growth model with wealth effects. As the capital stock is the only component of wealth which contributes to an individual’s utility, the model should be interpreted as a model of housing production and housing wealth since the capital stock affects utility. Consistent with empirical evidence on the relationship between residential investment and GDP across countries, there are significant non-linearities between housing market activity and aggregate income in our framework.
    Keywords: Development, housing, monetary policy, inflation.
    JEL: E31 E52 E58
    Date: 2015–11–01
  8. By: Evgeniya, Gorlova
    Abstract: We investigate the effect of intelligence on total factor productivity (TFP) using cross section data for 108 countries over the period 2000-2011. We find that intelligence, measured by national IQ scores, increases average level of each country’s TFP value relative to U.S.
    Keywords: TFP, intelligence, IQ, cross-country, human capital
    JEL: F0
    Date: 2016
  9. By: Angus C., Chu; Guido, Cozzi
    Abstract: This study examines the validity of two conventional approaches to growth accounting under endogenous technical change. We find that the traditional approach to growth accounting, pioneered by Solow (1957), is consistent with the lab-equipment specification for technological progress, whereas the more recent approach, proposed by Hayashi and Prescott (2002) and Kehoe and Prescott (2002), is consistent with the knowledge-driven specification. We develop a unified approach to growth accounting, which in essence takes a weighted average of the Solow approach and the Hayashi-Kehoe-Prescott approach. We show that our unified approach is consistent with a more general specification for technological progress under which the degree of capital intensity in the innovation process determines the relative weight placed on the two approaches. Finally, we apply our unified approach to data of the Chinese economy to explore the quantitative importance of capital accumulation on economic growth in China.
    Keywords: growth accounting; endogenous technical change; capital accumulation
    JEL: O3 O4
    Date: 2016–02
  10. By: Li, Kui-Wai; Zhou, Xianbo; Pan, Zhewen
    Abstract: This article uses a nonparametric varying coefficient panel data model to study the convergence of real GDP per capita among 120 world economies for the sample period of 1980-2010. The estimates show that the indirect contribution of initial income via the control variables is important. The mediating effect of control variables to affect growth is positive. The conditional speed of convergence is larger than the absolute counterpart at all levels of initial income. The convergence hypothesis does not hold for economies with extremely low level of development. The conclusion is robust for regional sub-samples of Europe, Asia, Latin America and Africa.
    Keywords: Convergence, growth, varying coefficient model, nonparametric
    JEL: O1 O11 O5 O57
    Date: 2016–02–03

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