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on Economic Growth |
| By: | Franck, Raphaël (Bar-Ilan University); Galor, Oded (Brown University) |
| Abstract: | The research explores the effect of industrialization on human capital formation. Exploiting exogenous regional variations in the adoption of steam engines across France, the study establishes that, in contrast to conventional wisdom that views early industrialization as a predominantly deskilling process, the industrial revolution was conducive for human capital formation, generating broad increases in literacy rates and educational attainment. |
| Keywords: | technology-skill complementarity, economic growth, industrialization, human capital, steam engine |
| JEL: | N33 N34 O14 O33 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9758&r=gro |
| By: | Olivier Gergaud (KEDGE BUSINESS SCHOOL); Morgane Laouénan (Sciences Po LIEPP); Etienne Wasmer (Département d'économie) |
| Abstract: | This paper describes a database of 1,243,776 notable people and 7,184,575 locations (Geolinks) associated with them throughout human history (3000BCE-2015AD). We first describe in details the various approaches and procedures adopted to extract the relevant information from their Wikipedia biographies and then analyze the database. Ten main facts emerge. 1. There has been an exponential growth over time of the database, with more than 60% of notable people still living in 2015, with the exception of a relative decline of the cohort born in the XVIIth century and a local minimum between 1645 and 1655. 2. The average lifespan has increased by 20 years, from 60 to 80 years, between the cohort born in 1400AD and the one born in 1900AD. 3. The share of women in the database follows a U-shape pattern, with a minimum in the XVIIth century and a maximum at 25% for the most recent cohorts. 4. The fraction of notable people in governance occupations has decreased while the fraction in occupations such as arts, literature media and sports has increased over the centuries; sports caught up to arts and literature for cohorts born in 1870 but remained at the same level until the 1950s cohorts; and eventually sports came to dominate the database after 1950. 5. The top 10 visible people born before 1890 are all non-American and have 10 different nationalities. Six out of the top 10 born after 1890 are instead U.S. born citizens. Since 1800, the share of people from Europe and the U.S. in the database declines, the number of people from Asia and the Southern Hemisphere grows to reach 20% of the database in 2000. Coincidentally, in 1637, the exact barycenter of the base was in the small village of Colombey-les-Deux-Eglises (Champagne Region in France), where Charles de Gaulle lived and passed away. Since the 1970s, the barycenter oscillates between Morocco, Algeria and Tunisia. 6. The average distance between places of birth and death follows a U-shape pattern: the median distance was 316km before 500AD, 100km between 500 and 1500AD, and has risen continuously since then. The greatest mobility occurs between the age of 15 and 25. 7. Individuals with the highest levels of visibility tend to be more distant from their birth place, with a median distance of 785km for the top percentile as compared to 389km for the top decile and 176km overall. 8. In all occupations, there has been a rise in international mobility since 1960. The fraction of locations in a country different from the place of birth went from 15% in 1955 to 35% after 2000. 9. There is no positive association between the size of cities and the visibility of people measured at the end of their life. If anything, the correlation is negative. 10. Last and not least, we find a positive correlation between the contemporaneous number of entrepreneurs and the urban growth of the city in which they are located the following decades; more strikingly, the same is also true with the contemporaneous number or share of artists, positively affecting next decades city growth; instead, we find a zero or negative correlation between the contemporaneous share of “militaries, politicians and religious people” and urban growth in the following decades. |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/h4tv2ee028raq0ib4dabsqqei&r=gro |
| By: | Mathieu Couttenier (University of Lausanne); Pauline Grosjean (School of Economics, University of New South Wales, Sydney); Marc Sangnier (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS) |
| 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 |
| JEL: | K42 N31 O14 Z13 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:1605&r=gro |
| By: | Álvarez-Nogal, Carlos; Prados de la Escosura, Leandro; Santiago-Caballero, Carlos |
| Abstract: | This paper explores the role of agriculture in Spain's contribution to the little divergence in Europe. On the basis of tithes, long-run trends in agricultural output are drawn. After a long period of relative stability, output suffered a severe contraction during 1570-1620, followed by stagnation to 1650, and steady expansion thereafter. Output per head shifted from a relatively high to a low path that persisted until the nineteenth century. The decline in agricultural output per head and per worker from a relatively high level contributed to Spain falling behind and, hence, to the Little Divergence in Europe. Output per worker moved along labour force in agriculture over the long run, supporting the depiction of Spain as a frontier economy. Institutional factors, in a context of financial and monetary instability and war, along climatic anomalies, provide explanatory hypotheses that deserve further research. |
| Keywords: | agriculture; early modern Spain; labour productivity; little divergence; tithes |
| JEL: | N53 O13 Q10 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11125&r=gro |
| By: | Claude Diebolt (BETA, University of Strasbourg Strasbourg, France) |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:afc:wpaper:01-16&r=gro |
| By: | Carreri, Maria; Dube, Oeindrila |
| Abstract: | Do natural resources impair institutional outcomes? Existing work studies how natural resources influence the behavior of leaders in power. We study how they influence leaders' rise to power. Our analysis focuses on oil price shocks and local democracy in Colombia, a country mired in civil conflict. We find that when the price of oil rises, legislators affiliated with right-wing paramilitary groups win office more in oil-producing municipalities. Consistent with the use of force to gain power, positive price shocks also induce an increase in paramilitary violence, and reduce electoral competition: fewer candidates run for office, and winners are elected with a wider vote margin. Ultimately, fewer centrist legislators are elected to office, and there is diminished representation at the center. Our findings highlight how natural resources undermine democracy by distorting elections, and suggest that conflict leaves the political sector vulnerable to the resource curse. |
| Keywords: | conflict; democracy; elections; leaders; Natural resources |
| JEL: | D72 H11 H70 O12 O13 Q34 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11136&r=gro |
| By: | Masayuki Yao (Research Associate (Non-tenured), Department of Economics, Keio University) |
| Abstract: | This study infinite-horizon deterministic dynamic programming problems based on recursive utility in discrete time. Under a small number of conditions, we show that the Bellman operator has a fixed point using Knaster-Tarski's fixed point theorem. We also show the fixed point of the Bellman operator can be computed by iteration from the initial function between the lower boundary and the fixed point. To show the convergence theorem, we use Tarski-Kantorovitch's fixed point theorem. |
| Keywords: | Recursive utility, Fixed point theorem, Dynamic programming, Bellman equation |
| JEL: | C61 O41 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2016-08&r=gro |
| By: | Rumman Khan; Oliver Morrissey; Paul Mosley |
| Abstract: | Although growth has improved substantially in most African countries in recent years, poverty across the continent has fallen very little in the aggregate. There have been strong poverty reduction performances in some countries, but others exhibit higher poverty rates now than in 1990 despite economic growth. This paper seeks to understand the reasons for this variance; why there are apparently ‘two Africas’, one with an ability to reduce poverty and one without. The main argument is that some of the reasons for this difference are rooted in colonial times. Countries with strong smallholder cash crop sectors emerged into independence with broad-based labour-intensive economies supporting a more equitable income distribution conducive to inclusive growth and poverty reduction compared to initially more inequitable mineral resource and large farm based economies. This did not necessarily determine the post-colonial path: many peasant export economies achieved no poverty reduction (often because of little growth), and some mine/plantation economies did achieve poverty reduction. The key reasons for this evolution lie in the motivation and ability of African elites to form pro-poor coalitions, which in some cases were then able to implement policies supporting a pro-poor pattern of growth. |
| Keywords: | Poverty, sub-Saharan Africa, colonial legacy, inclusive growth |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcre:16/01&r=gro |
| By: | Dinkelman, Taryn; Mariotti, Martine |
| Abstract: | We provide new evidence of one channel through which circular labor migration has long run effects on origin communities: by raising completed human capital of the next generation. We estimate the net effects of migration from Malawi to South African mines using newly digitized Census and administrative data on access to mine jobs, a difference-in-differences strategy and two opposite-signed and plausibly exogenous shocks to the option to migrate. Twenty years after these shocks, human capital is 4.8-6.9% higher among cohorts who were eligible for schooling in communities with the easiest access to migrant jobs. |
| Keywords: | Africa; human capital formation; labor migration; long run impacts; origin communities |
| JEL: | F22 F24 N37 O12 O15 O55 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11134&r=gro |
| By: | Won Jun Nah; Marc Lavoie (University of Ottawa (CA)) |
| Abstract: | A simple neo-Kaleckian open-economy model is presented and its implications for growth regimes are analyzed. The present model features long run-convergence to its normal rate of capacity utilization, which is conditionally achieved by incorporating the Harrodian principle of instability and autonomous growth in foreign demand. It is demonstrated that some aspects of the main Kaleckian results can be preserved not only in the short run but also in the long run, in the sense that both (i) a decrease in the propensity to save, and (ii) a change in income distribution favoring labor, bring about higher average rates of production growth and capital accumulation. However, the long-run impact of a change in the profit share is shown to be subjected to the condition that the responsiveness of the real exchange rate with respect to the profit share has to be bounded from above, confirming that the scope for wage-led demand or wage-led growth can be limited by open-economy considerations. |
| Keywords: | neo-Kaleckian, growth, capacity utilization, exports, profit share, real exchange rate |
| JEL: | E11 F41 O41 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:pke:wpaper:pkwp1604&r=gro |
| By: | Tomas Havranek; Roman Horvath; Ayaz Zeynalov |
| Abstract: | An important question in development studies is how natural resource richness affects long-term economic growth. No consensus answer, however, has yet emerged, with approximately 40% of empirical papers finding a negative effect, 40% finding no effect, and 20% finding a positive effect. Does the literature taken together imply the existence of the so-called natural resource curse? In a quantitative survey of 402 estimates reported in 33 studies, we find that the effect of natural resources on growth is very small when potential publication bias and method heterogeneity are taken into account. Our results also suggest that three aspects of study design are especially effective in explaining the differences in results across studies: 1) including an interaction between natural resources and institutional quality, 2) controlling for the level of investment activity, and 3) distinguishing between different types of natural resources. |
| Keywords: | Economic growth, institutions, meta-analysis, natural resources, publication selection bias |
| JEL: | C51 O13 Q30 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:wpaper:2016/01&r=gro |
| By: | Chirwa, Themba G; Odhiambo, Nicholas M |
| Abstract: | In this study, we examine empirically the key determinants of economic growth in South Africa ???using the ARDL bounds-testing approach. The paper has been motivated by the low and dwindlingeconomic growth that South Africa has been experiencing in recent years. Our study finds that thekey macroeconomic determinants that are significantly associated with economic growth in SouthAfrica include, amongst others, investment, human capital development, population growth,government consumption, inflation, and international trade. The study finds that in the short run,investment is positively associated with economic growth, while population growth and governmentconsumption are negatively associated with economic growth. However, in the long run, the studyfinds investment, human capital development and international trade to be positively associatedwith economic growth, while population growth, government consumption, and inflation arenegatively associated with economic growth. These results have important policy implications.They imply that economic strategies pursued in the short run should include policies that attractinvestment, and reduce population growth and government consumption. However, long-runstrategies to be adopted should include those that attract long-term investments, improve thequality of education, as well as trade liberalization; and ensure a reduction in population growth,government consumption and inflation. |
| Keywords: | Republic of South Africa; Autoregressive Distributed Lag Models; Economic Growth |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:uza:wpaper:19975&r=gro |
| By: | Rodríguez, Xosé A.; Arias, Carlos; Rodríguez-González, Ana |
| Abstract: | The present paper explores the relationship between physical and economic depletion of a nonrenewable natural resource using a decomposition of mining costs akin to the one used in the literature on productivity and technical change. We argue that this decomposition can provide key insights on future availability of nonrenewable natural resources. Using data on slate mining in Galicia Northern Spain), we provide quantitative evidence of the role played by physical depletion in economic exhaustion but also of the offsetting effects of technical change. Additionally, we provide a measure of the effects on economic depletion of input prices, output, fixed inputs and production scale. Input prices and fixed input misallocation contributes far more to economic depletion than physical depletion while technical change has a remarkable negative contribution to economic depletion. Policy implications are discussed, particularly, the importance of promoting technical change. |
| Keywords: | Non-renewable natural resources, Physical depletion, Economic depletion, Mining cost, Slate mining, Technical change, Total Cost Growth decomposition |
| JEL: | C32 L72 O40 Q30 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:oeg:wpaper:2015/01&r=gro |
| By: | DAO, N.T. (Mercator Research Insitute on Global Commons and Climate Change, Berlin); DAVILA, J. (Université catholique de Louvain, CORE, Belgium) |
| Abstract: | This paper proposes a new mechanism linking technology, the gender gap in education, and fertility in a growth model in order to explain the long run transition from stagnation to modern sustained growth, through the demographic transition, and the accompanying improvements in gender equality in education and income. The mechanism includes three main components. First, increases in the level of technology not only increase the return to human capital but also reduce women's time in doing housework, leaving women with more time for child care and labor-force participation, since technological progress creates labour-saving products for doing housework. Second, the decreases in women's time devoted to housework in the future make households today invest relatively less in education for their sons in order to invest more in education for their daughters because the marginal return to female education is higher than that to male education, therefore, improving the gender equality in education. Third, the better gender equality in education, in turn, accelerates the technological progress. This positive feedback loop generates a demographic transition accompanied with accelerated economic growth. |
| Keywords: | Technological progress; gender inequality in education; demographic transition; fertility, human capital |
| JEL: | J11 J13 J16 O11 O40 |
| Date: | 2015–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2015038&r=gro |
| By: | Andrew M. Warner |
| Abstract: | The global boom in hydrocarbon, metal and mineral prices since the year 2000 created huge economic rents - rents which, once invested, were widely expected to promote productivity growth in other parts of the booming economies, creating a lasting legacy of the boom years. This paper asks whether this has happened. To properly address this question the empirical strategy must look behind the veil of the booming sector because that, by definition, will boom in a boom. So the paper considers new data on GDP per person outside of the resource sector. Despite having vast sums to invest, GDP growth per-capita outside of the booming sectors appears on average to have been no faster during the boom years than before. The paper finds no country in which (non-resource) growth per-person has been statisticallysignificantly higher during the boom years. In some Gulf states, oil rents have financed a migration-facilitated economic expansion with small or negative productivity gains. Overall, there is little evidence the booms have left behind the anticipated productivity transformation in the domestic economies. It appears that current policies are, overall, prooving insufficient to spur lasting development outside resource intensive sectors. |
| Keywords: | Economic growth;Dutch disease;Public investment;Resource Booms, gdp, economy, investment, capital, value, Infrastructures, All Countries, |
| Date: | 2015–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:15/237&r=gro |
| By: | Tetsuo Ono (Graduate School of Economics, Osaka University); Yuki Uchida (Graduate School of Economics, Osaka University) |
| Abstract: | This study considers public education policy and its impact on growth and wel- fare across generations. In particular, the study compares two fiscal perspectives| tax finance and debt finance|and shows that in a competitive equilibrium context, the growth and utility in the debt-finance case could be higher than those in the tax-finance case in the long run. However, the result is reversed when the policy is shaped by politics. Voters choose debt finance, despite its worse performance, in each period because a current generation can pass the cost of debt repayment to future generations. |
| Keywords: | Economic growth, Human capital, Public debt, Political equilib- rium |
| JEL: | D70 E24 H63 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1601&r=gro |
| By: | El Alaoui, Aicha |
| Abstract: | This paper tries to examine if women’s education affects the economic growth. To illustrate this aim, four countries cases have been presented: Morocco, Egypt, Tunisia, and Algeria, named MATE. The motive behind choosing them was because these countries have many common religious and cultural norms and values. The statistical analysis of data over the period 1960-2012 shows that the relationship between fertility rate and different measures of education is negative. Averages literacy rate and labour participation of the female are less than that of male. Two panel models are estimated over the period 2000-2012: a 'general' panel model and a 'gender' panel model. In the first model, the explanatory variables are introduced without gender’s characteristics in order to measure their impact on the economic growth. In the second model, the explanatory variables are introduced in the first model with gender’s distinguishing excluding variables that measure the quality of governance and institutional. The main findings are that women’s education, particularly, tertiary education, women’s labour force participation and institutional capital affect positively economic growth. On the contrary, the primary and secondary school enrolment are negatively linked to the economic growth. This paper concludes that women’s tertiary education is a master-key to economic growth and development accompanied by a healthy and good quality of institutional capital and by eliminating all forms of gender discrimination. |
| Keywords: | Economic growth, Panel analysis, Women’s education, Institutional capital |
| JEL: | C23 I25 O15 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69787&r=gro |
| By: | Oukhallou, Youssef |
| Abstract: | This paper discusses the role of public investment in the determination of output growth from different theoretical and empirical points of view. The light is shed on the factors that allegedly explain the success and/or the failure of public investment policies in enhancing productivity and supporting GDP, based on a review of empirical evidence in advanced and developing economies. The downstream objective is to provide decision makers with a set of general rules-of-thumb that are likely to help them improve the macroeconomic returns of public investment. The latter are found to be significantly influenced by efficiency and profitability-based selectivity of investment projects. Countries with a relatively low capital-labor ratio usually have higher public and private capital profitability, while the public-private investment substitutability increases the likelihood of crowding out effects. The paper also gives hints on the possible existence of an optimal growth-maximizing level of public investment. |
| Keywords: | GDP growth, Public Investment, Productivity, Private Investment, Development |
| JEL: | E62 H54 O40 |
| Date: | 2016–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69772&r=gro |
| By: | Osvaldo Lagares |
| Abstract: | This paper examines the growth effects of imported and domestic capital in thirty two Latin America economies from 1960 to 2010. Disaggregated data on imported and domestic physical capital is compiled for each economy during the time horizon along with measures of human capital and other economic aggregates. Alternative growth econometric methods and instrumental variables procedures are then applied to control for economic policy, trade distortions and endowments effects. We find significant evidence that the acquisition of capital imports enhances economic growth and lessens relative income differences, particularly at lower income levels. We also find that relative income grows faster in countries that invest more on domestic capital. Our evidence show that countries which experienced a slowdown in economic growth were relatively richer in 1970, and acquired relatively less capital imports and domestic capital. Our findings indicate the existence of a positive correlation between higher productivity growth and the acquisition of capital imports in these countries. Capital accumulation is found to be a key driver of growth and development in Latin America. |
| Keywords: | Latin America, Capital accumulation, Economic growth, Relative income differences |
| JEL: | F43 O11 O40 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:16/03&r=gro |
| By: | Phiri, Andrew |
| Abstract: | Using annual data collected from 1988 to 2014, this study provides evidence of a nonlinear relationship between military spending, economic growth and other growth determinants for the South African economy. The empirical study is based on estimates of a logistic smooth transition regression (LSTR) model and our empirical results point to an inverted U-shaped relationship between military spending and economic growth for the data. Furthermore, our empirical results suggest that the current levels of military spending, as a component of total government expenditure, are too high in the South African economy and need to be transferred towards more productive non-military expenditure in order to improve the performance of economic growth and other growth determinants. |
| Keywords: | Military expenditure; Non-military expenditure; Economic growth; Investment; Labour, Exports; South Africa; Sub-Saharan Africa; Developing country; Smooth transition regression (STR) model. |
| JEL: | C32 H56 O40 |
| Date: | 2016–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69730&r=gro |
| By: | Abutu, Usman Ojonugwa; Agbede, Esther Abdul |
| Abstract: | This study examined the relationship between government expenditure and economic growth in Nigeria using a co-integration and error correction model for the period 1970-2010. A time-series data was obtained from the Central Bank of Nigeria for the analysis. The outcome of the ADF unit root test indicated that all variables included in the model were non-stationary at their levels but integrated of order one, I(1). From the long-run analysis, the results revealed a positive and significant linear relationship between the two categories of government expenditure and economic growth (measured by real GDP), whereas on the short-run, economic growth had a positive and significant linear relationship with recurrent expenditure and negative but significant relationship with capital expenditure. The result of the Pairwise Granger Causality test in a Vector Error Correction Model indicated a unidirectional (one-way) causality, running from economic growth to capital expenditure and recurrent expenditure to economic growth, while bi-directional causality runs from capital expenditure to recurrent expenditure and vice versa. Therefore, the study recommended the need to stimulate economic growth by allocating appropriate proportion to capital expenditure of government in the national budget. |
| Keywords: | Public Expenditure, Economic growth, Granger Causality, Cointegration, Augmented Dickey-Fuller |
| JEL: | F43 |
| Date: | 2015–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69676&r=gro |