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on Economic Growth |
| By: | S.P. Harish (New York University); Christopher Paik (NYU Abu Dhabi) |
| Abstract: | State presence and longevity have long been associated with growth and development, and yet analyzing their relationship remains challenging as both the length of state rule and geographical boundaries change over time. After addressing conceptual and practical concerns on its construction, we present a measure of the mean duration of state rule that is aimed at resolving some of these issues. We then present our findings on the relationship between our measure and local development, drawing from observations in Europe spanning from 0 AD to 2000 AD. We find that during this period, the mean duration of state rule and the local income level have a nonlinear, inverse U-shaped relationship, controlling for a set of historical, geographic and socioeconomic factors. Regions that have historically experienced short or long duration of state rule on average lag behind in their local wealth today, while those that have experienced medium-duration state rule on average fare better. |
| Keywords: | Development, Economic Output, Sovereign Turnovers |
| JEL: | O10 O47 O52 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:hic:wpaper:219&r=gro |
| By: | Toman Barsbai (Kiel Institute for the World Economy - Kiel Institute for the World Economy); Hillel Rapoport (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Andreas Steinmayr (University of Munich); Christoph Trebesch (CESifo - Center for Economic Studies and Ifo for Economic Research - CESifo Group Munich, University of Munich) |
| Abstract: | Migration contributes to the circulation of goods, knowledge, and ideas. Using community and individual-level data from Moldova, we show that the emigration wave that started in the late 1990s strongly affected electoral outcomes and political preferences in Moldova during the following decade, eventually contributing to the fall of the last Communist government in Europe. Our results are suggestive of information transmission and cultural diffusion channels. Identification relies on the quasiexperimental context and on the differential effects arising from the fact that emigration was directed both to more democratic Western Europe and to less democratic Russia. |
| Keywords: | Emigration,political institutions,elections,social networks,information transmission,cultural diffusion |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01321962&r=gro |
| By: | Guillaume Daudin (LEDa - Laboratoire d'Economie de Dauphine - Université Paris IX - Paris Dauphine); Raphaël Franck (Bar-Ilan University - Bar-Ilan University [Israël]); Hillel Rapoport (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics) |
| Abstract: | France experienced the demographic transition before richer and more educated countries. This paper offers a novel explanation for this puzzle that emphasizes the diffusion of culture and information through internal migration. It tests how migration affected fertility by building a decennial bilateral migration matrix between French regions for 1861-1911. The identification strategy uses exogenous variation in transportation costs resulting from the construction of railways. The results suggest the convergence towards low birth rates can be explained by the diffusion of low-fertility norms by migrants, especially by migrants to and from Paris. |
| Keywords: | Fertility,France,Demographic Transition,Migration |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01321952&r=gro |
| By: | Guerzoni, Marco; Jordan, Alexander (University of Turin) |
| Abstract: | This paper analyses culture as a determinant of technology adoption in a developing country. While the literature extensively discusses the influence of culture upon economic growth, little attention has been paid to the mechanisms that can explain this link at the micro level. In this paper, we postulate that culture may play a crucial role in hindering or fostering the adoption and diffusion of innovation, a key trigger of the engine of growth. We thus borrow from the literature on the economics of innovation, and we model the impact of culture upon households’ decision to adopt innovation. We focus on developing countries and specifically on the adoption of fertilizer in Ethiopian rural areas. This empirical study uses the Ethiopia Rural Household Survey† to attempt to differentiate between individual cultural traits, namely, ethnicity and religion, and the cultural homogeneity of the environment as co-determinants of fertilizer adoption. We thus apply a multivariate survival model for clustered and correlated observations and find a positive effect on the diffusion of fertilizer. Firstly, habits and social norms, proxied by ethnicity, provide a better explanation for the role of culture, than religious beliefs, as usually posited in the literature. Secondly, the cultural environment plays a decisive role. While a homogeneous ethnic environment accelerates the diffusion of fertilizer, a diverse religious background in a community creates an environment conducive to initial adoption. While the direct contribution of this paper relates to technology adoption at the micro level, we believe it represents a first step in gaining a better understanding of the relation between culture and growth at the micro level. |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:201605&r=gro |
| By: | Acemoglu, Daron; Akcigit, Ufuk; Hanley, Douglas; Kerr, William R. |
| Abstract: | We develop a microeconomic model of endogenous growth where clean and dirty technologies compete in production and innovation–in the sense that research can be directed to either clean or dirty technologies. If dirty technologies are more advanced to start with, the potential transition to clean technology can be difficult both because clean research must climb several rungs to catch up with dirty technology and because this gap discourages research effort directed towards clean technologies. Carbon taxes and research subsidies may nonetheless encourage production and innovation in clean technologies, though the transition will typically be slow. We characterize certain general properties of the transition path from dirty to clean technology. We then estimate the model using a combination of regression analysis on the relationship between R&D and patents, and simulated method of moments using microdata on employment, production, R&D, firm growth, entry and exit from the US energy sector. The model’s quantitative implications match a range of moments not targeted in the estimation quite well. We then characterize the optimal policy path implied by the model and our estimates. Optimal policy makes heavy use of research subsidies as well as carbon taxes. We use the model to evaluate the welfare consequences of a range of alternative policies. |
| Keywords: | carbon cycle, directed technological change, environment, innovation, optimal policy |
| JEL: | O30 O31 O33 C65 |
| Date: | 2015–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofrdp:2015_026&r=gro |
| By: | Masuch, Klaus; Moshammer, Edmund; Pierluigi, Beatrice |
| Abstract: | This paper provides empirical evidence in support of the view that the quality of institutions is an important determinant of long-term growth of European countries. When also taking into account the initial level of GDP per capita and government debt, cross-country institutional differences can explain to a great extent the relative long-term GDP performance of European countries. It also shows that an initial government debt level above a threshold (e.g. 60-70%) coupled with institutional quality below the EU average tends to be associated with particularly poor long-term real growth performance. Interestingly, the detrimental effect of high debt levels on long-term growth seems cushioned by the presence of very sound institutions. This might be because good institutions help to alleviate the debt problem in various ways, e.g. by ensuring sufficient fiscal consolidation in the longer-run, allowing for better use of government expenditures and promoting sustainable growth, social fairness and more efficient tax administration. The quality of national institutions seems to enhance the long-term GDP performance across a large sample of countries, also including OECD countries outside Europe. The paper offers some evidence that, in the presence of good institutions, conditions for catching-up seem generally good also for euro-area and fixed exchange rate countries. Looking at sub-groupings, it seems that sound institutions may be particularly important for long-term growth in the countries where the exchange rate tool is no longer available (and where also sovereign debt is high), and less so in the countries with flexible exchange rate regimes. However, this result is preliminary and requires further research. The empirical findings on the importance of institutions are robust to various measures of output growth, different measures of institutional indicators, different sample sizes, different country groupings and to the inclusion of additional control variables. Overall, the results tend to support the call for structural reforms in general and reforms enhancing the efficiency of public administration and regulation, the rule of law and the fight against rent-seeking and corruption in particular. |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:eps:cepswp:11482&r=gro |
| By: | Bruno Lanz (IHEID, The Graduate Institute of International and Development Studies, Geneva); Simon Dietz (LSE, London School of Economics and Political Science); Tim Swanson (IHEID, The Graduate Institute of International and Development Studies, Geneva) |
| Abstract: | We structurally estimate a two-sector Schumpeterian growth model with endogenous population and finite land reserves to study the long-run evolution of global population, technological progress and the demand for food. The estimated model closely replicates trajectories for world population, GDP, sectoral productivity growth and crop land area from 1960 to 2010. Projections from 2010 onwards show a slowdown of technological progress, and, because it is a key determinant of fertility costs, significant population growth. By 2100 global population reaches 12.4 billion and agricultural production doubles, but the land constraint does not bind because of capital investment and technological progress. |
| Keywords: | Global population; Technological progress; Economic growth; Agriculture; Environment; Malthusian constraints; Land conversion; Structural estimation |
| JEL: | O11 O13 J11 C53 C61 Q15 Q24 Q50 |
| Date: | 2016–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:gii:giihei:heidwp04-2016&r=gro |
| By: | Cormac Ó Gráda |
| Abstract: | The lecture paper focuses on some topics that remain current in famine studies. First, it reviews the link between food prices and the severity of famines as reflected in excess mortality. Second, it places the death tolls from several recent famines in sub-Saharan Africa in historical context. Third, it reviews the impact of famines on fertility. Famines are always associated with a reduction in births; but to what extent are those births lost or births postponed? Fourth, it reviews the literature that invokes famines as a testing ground for the foetal origins hypothesis. Finally, it reviews the prospect of a near future in which famines have been consigned to history. |
| Keywords: | Famine; Malnutrition |
| JEL: | N1 O1 J13 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201603&r=gro |
| By: | Hasnul, Al Gifari |
| Abstract: | The relationship between government expenditure and economic growth has been debated for decades and has not clearly stated yet. This paper gives a further evidence on the relationship between government expenditure and economic growth in the case of Malaysia. In this study, the government expenditure has been disaggregated in to the government operating and development expenditure. We also classified the government expenditure based on the sector of which it expensed. We used OLS technique to find the fixed effects of government expenditure on economic growth for the last 45 years. This investigation is made by using the time series data during the period 1970 – 2014. Our result indicates that there is a negative correlation between government expenditure and economic growth in Malaysia for the last 45 years. Moreover, the classification of government expenditure indicates that only housing sector expenditure and development expenditure significantly contribute to a lower economic growth. Education, defense, healthcare, and operating expenditure do not show significant any evidence of its impact on the economic growth. These finding may give some overview of policy implications to the Malaysia policymakers on optimizing the effects of government expenditure in economic growth. |
| Keywords: | Government Expenditure; Economic Growth, OLS. |
| JEL: | H5 H52 |
| Date: | 2015–12–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:71254&r=gro |
| By: | Thomas I. Palley |
| Abstract: | This paper examines the relationship between inequality and growth in the neo-Kaleckian and Cambridge growth models. The paper explores the channels whereby functional and personal income distribution impact growth. The growth - inequality relationship can be negative or positive, depending on the economy's characteristics. Contrary to widespread claims, inequality per se does not impact growth through macroeconomic channels. Instead, both growth and inequality are impacted by changes in the underlying forms and pattern of income payments. However, inequality is critical at the microeconomic level as it explains differences in household propensities to consume which are at the foundation of neo-Kaleckian and Cambridge growth theory. |
| Keywords: | Income Inequality, growth, neo-Kaleckian theory, Cambridge growth theory |
| JEL: | E0 E12 E25 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:imk:wpaper:167-2016&r=gro |
| By: | Ariun-Erdene Bayarjargal |
| Abstract: | This paper provides new evidence on the relationship between economic growth and income inequality. The data covers the period between 1870 and 2011 for 26 countries. In contrast to the Kuznets hypothesis, there is evidence of a strong U-curve relationship between the top income shares and per capita income. This finding implies that income inequality measured by a ratio of the income shares of top earners to that of the rest of population increases as economy develops. The results also suggest that top income earners benefit when the economy grows at, or above the preceding year’s, 5-year Moving Average, and long-run trend growth rates, but do not significantly suffer during downturns in growth. |
| Keywords: | Top income shares, inequality, kuznets curve, economic growth |
| JEL: | D31 H23 N30 O15 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2016-09&r=gro |
| By: | Stolbov, Mikhail |
| Abstract: | Causality between the ratio of domestic private credit to GDP and growth in real GDP per capita is investigated in a country-by-country time-series framework for 24 OECD economies over the period 1980–2013. The proposed threefold methodology to test for causal linkages integrates (i) lag-augmented VAR Granger causality tests, (ii) Breitung-Candelon causality tests in the frequency domain, and (iii) testing for causal inference based on a fully modified OLS (FMOLS) approach. For 12 of 24 countries in the sample, the three tests yield uniform results in terms of causality presence (absence) and direction. Causality running from credit depth to economic growth is found for the UK, Australia, Switzerland, and Greece. The findings lend no support to the view that financial development shifts from a supply-leading to demand-following pattern as economic development proceeds. The aggregate results mesh well with the current discussion on “too much finance” and disintermediation effects. However, idiosyncratic country determinants also appear significant. |
| Keywords: | causality, economic growth, financial development, FMOLS, frequency domain |
| JEL: | C22 E44 G21 O16 |
| Date: | 2015–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofitp:2015_015&r=gro |