nep-gro New Economics Papers
on Economic Growth
Issue of 2016‒06‒14
seven papers chosen by
Marc Klemp
Brown University

  1. The Cultural Diffusion of the Fertility Transition: Evidence from Internal Migration in 19th Century France By Daudin, Guillaume; Franck, Raphaël; Rapoport, Hillel
  2. Agricultural Legacy, Individualistic Culture, and Techology Adoption By James B. Ang
  3. Student loans, fertility, and economic growth By Miyazaki, Koichi
  4. On the causal relationship between nutrition and economic Growth: Evidence from sub-Saharan Africa By Ogundari, Kolawole; Aromolaran, Adebayo
  5. Manufacturing as the Key Engine of Economic Growth for Middle-Income Economies By Su, Dan; Yao, Yang
  6. Stationary Growth and the Impossibility of Capital Efficiency Gains By Li, Defu; Bental, Benjamin; Huang, Jiuli
  7. What type of finance matters for growth? Bayesian model averaging evidence By Hasan, Iftekhar; Horvath, Roman; Mares, Jan

  1. By: Daudin, Guillaume (Université Paris-Dauphine); Franck, Raphaël (Bar-Ilan University); Rapoport, Hillel (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
    JEL: J13 N33 O15
    Date: 2016–05
  2. By: James B. Ang (Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, 14 Nanyang Drive, Singapore 637332)
    Abstract: This paper presents evidence on the relationship between culture and technology adoption. It hy-pothesizes that societies with more individualistic cultures are more inclined to embrace new tech-nologies. Using data for 82 countries, the estimates show that the technology adoption index of Comin et al. (2010) strongly correlates with national scores on individualistic cultures. Consistent evidence of this is provided by analysis conducted at the individual level using data from the World Value Surveys. Based on the notion that farming rice makes the members of a society more interdependent, and hence less individualistic, historical information on the suitability of land for rice farming is used as an instrument to isolate the endogenous influence of culture. Under the identifying restriction assumption that such an agricultural legacy explains differences in technolog-ical development in the modern world through influencing the formation of individualistic cultures, the instrumental variables estimates consistently show that the variation in the exogenous component of individualistic cultures significantly explains differences in the levels of current technology adoption across the globe. Similar findings are obtained when the analysis is conducted using state-level data from the United States. On the whole, these results lend strong support to our hypothe-sis that countries with higher scores on individualism are more inclined to adopt new technologies, thereby providing a framework for understanding the underlying causes of the variation in the lev-els of technological development across countries.
    Keywords: technology adoption, individualism, cross-country studies
    JEL: O30 O40
    Date: 2015–09
  3. By: Miyazaki, Koichi
    Abstract: The cost of attaining higher education is growing in some developed countries. More young people borrow larger amounts than before to finance their higher education. Several media reports indicate that student loans might affect young people's decision making regarding important life events such as marriage, childbirth, purchasing a house, and so on. Specifically, this paper focuses on how the burden of student loans affects young people's decision making with regard to the number of children to have, and studies the fertility rate, gross domestic product (GDP) growth rate, and growth rate of GDP per capita using a three-period overlapping generations model. A young agent needs to borrow to accumulate his/her human capital, although for some reason, s/he faces the borrowing constraint. In the next period, the agent repays his/her debt as well as determines the number of children to have. Under this setting, this paper analyzes how the tightness of the borrowing constraints affects the growth rates of the population, GDP, and GDP per capita. The paper finds that when rearing children is time-consuming, the population growth rate decreases as the borrowing constraints are relaxed. Moreover, the paper shows a case in which the GDP growth rate decreases as the borrowing constraints are relaxed, whereas the growth rate of GDP per capita still increases. In addition, I show that if the cost of rearing children is mainly monetary, then the population growth rate is not necessarily decreasing as the borrowing constraints are relaxed. The paper also calibrates the model using U.S. data.
    Keywords: Student loans, human capital accumulation, fertility, growth rate of GDP, growth rate of GDP per capita, overlapping generations model
    JEL: E44 I25 J13 J24
    Date: 2016–05–24
  4. By: Ogundari, Kolawole; Aromolaran, Adebayo
    Abstract: The study investigates the causal relationship between nutrition and economic growth in sub Saharan Africa (SSA). A dynamic panel causality test based on the Blundell-Bond’s system generalized methods-of-moment (GMM) employed. To make efficient inference for the estimates, we check for the panel unit root and cointegration relationship amongst the variables. The variables were found to be non-stationary at level, stationary after first difference and co-integrated. The results of the causality tests reveal evidence of long and short-run bi-directional causality between nutrition and economic growth; which implies that nutritional improvement is a cause and consequence of economic growth and vice versa.
    Keywords: Nutrition, Economic Growth, Causality, Cross-country, Panel data, SSA, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, B23, C23, E03, E21, I31,
    Date: 2016–08–01
  5. By: Su, Dan (Asian Development Bank Institute); Yao, Yang (Asian Development Bank Institute)
    Abstract: This paper revisits the role of the manufacturing sector during the middle-income stage. By exploiting a large dataset that covers internationally comparable sectoral information, we prove that the manufacturing sector is imbued with three important characteristics. First, for middle-income economies, manufacturing pulls along services, instead of the other way around. A decline in the manufacturing sector growth rate will negatively affect the growth rate of the services sector, in both the short-run and long-run meanings. Second, we show that manufacturing development not only promotes the incentives of savings, but also accelerates the pace of technological accumulation. Third, an increased share of the manufacturing sector in middle-income economies can enhance the utilization of human capital and economic institutions. Our empirical findings indicate that the manufacturing sector is still the key engine of economic growth for middle-income economies.
    Keywords: manufacturing sector; middle-income status; middle-income economies; empirical research; dataset; economic growth; growth engine; services; savings; technological accumulation; human capital; economic institutions
    JEL: L16 O14 O47
    Date: 2016–05–25
  6. By: Li, Defu; Bental, Benjamin; Huang, Jiuli
    Abstract: Improving the efficiency either in the process of factor accumulation or in the process of production of final output is often considered as a main driving force for the sustainable growth of modern economies. However, this article proves that for the most important input, physical capital, total efficiency, i.e. the total efficiency gained in the process of accumulation and in the production process, must be zero along a stationary growth path.
    Keywords: Neoclassical Growth Model; Uzawa’s Theorem; Improving Efficiency; Technical Change; Stationary Growth Path
    JEL: E13 O30 O41
    Date: 2016–05–21
  7. By: Hasan, Iftekhar; Horvath, Roman; Mares, Jan
    Abstract: We examine the effect of finance on long-term economic growth using Bayesian model averaging to address model uncertainty in cross-country growth regressions. The literature largely focuses on financial indicators that assess the financial depth of banks and stock markets. We examine these indicators jointly with newly developed indicators that assess the stability and efficiency of financial markets. Once we subject the finance-growth regressions to model uncertainty, our results suggest that commonly used indicators of financial development are not robustly related to long-term growth. However, the findings from our global sample indicate that one newly developed indicator – the efficiency of financial intermediaries – is robustly related to long-term growth.
    Keywords: finance, growth, Bayesian model averaging
    JEL: C11 G10 O40
    Date: 2015–08–20

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