nep-gro New Economics Papers
on Economic Growth
Issue of 2016‒08‒07
eight papers chosen by
Marc Klemp
Brown University

  1. Ethnic Inequality By Alesina, Alberto Francesco; Michalopoulos, Stelios; Papaioannou, Ellias
  2. Culture and Institutions By Alesina, Alberto Francesco; Giuliano, Paola
  3. In God We Learn? Religions' Universal Messages, Context-Specific Effects, and Minority Status By Méon, Pierre-Guillaume; Tojerow, Ilan
  4. Human Capital and Growth of E-postal Services: A cross-country Analysis in Developing Countries By Dalibor Gottwald; Libor Švadlenka; Hana Pavlisová
  5. Inequality and Growth: The Role of Human Capital with Heterogeneous Skills By Borissov, Kirill; Bosi, Stefano; Ha-Huy, Thai; Modesto, Leonor
  6. Substitutability and the social cost of carbon in a solvable growth model with irreversible climate change By Quaas, Martin F.; Bröcker, Johannes
  7. An empirical test of the exogenous growth models: Evidence from three Southern African countries By Chirwa, Themba Gilbert; Odhiambo, Nicholas Mbaya
  8. Finite Lifetimes, Patents' Length and Breadth, and Growth By Bharat Diwakar; Gilad Sorek

  1. By: Alesina, Alberto Francesco; Michalopoulos, Stelios; Papaioannou, Ellias
    Abstract: This study explores the consequences and origins of between-ethnicity economic inequality across countries. First, combining satellite images of nighttime luminosity with the historical homelands of ethnolinguistic groups we construct measures of ethnic inequality for a large sample of countries. We also compile proxies of overall spatial inequality and regional inequality across administrative units. Second, we uncover a strong negative association between ethnic inequality and contemporary comparative development; the correlation is also present when we condition on regional inequality, which is itself related to under-development. Third, we investigate the roots of ethnic inequality and establish that differences in geographic endowments across ethnic homelands explain a sizable fraction of the observed variation in economic disparities across groups. Fourth, we show that ethnic-specific inequality in geographic endowments is also linked to under-development.
    Date: 2016
  2. By: Alesina, Alberto Francesco; Giuliano, Paola
    Abstract: A growing body of empirical work measuring different types of cultural traits has shown that culture matters for a variety of economic outcomes. This paper focuses on one specific aspect of the relevance of culture: its relationship to institutions. We review work with a theoretical, empirical, and historical bent to assess the presence of a two-way causal effect between culture and institutions.
    Date: 2015
  3. By: Méon, Pierre-Guillaume (Free University of Brussels); Tojerow, Ilan (Free University of Brussels)
    Abstract: We study the relationship between major religious denominations and individuals' levels of education, using the World Values Survey. In a first step, running country-by-country regressions, we report first-time evidence that no single denomination has a universal effect on education. Each denomination has a positive and statistically significant effect in some countries, a negative and statistically significant effect in others, and a statistically insignificant effect elsewhere. In a second step, we relate the sign of the impact of a denomination in a country to whether the denomination is a minority in that country. We find that denominations that are a minority in a country are more likely to be associated with a higher level of education, and less likely to be associated with a lower level of education in that country. In both steps, the findings are independent from the specification of the regressions used in the first stage to determine the sign of the impact of denominations on educational outcomes. The finding of the second step is moreover robust to defining minority denominations using various thresholds. It is robust to controlling for whether the denomination is a state religion, for the country's level of democracy, per capita GDP, or level of education, to introducing denomination- and country- fixed effects, and to controlling for the identity of the largest other denomination in the country.
    Keywords: religion, education, minority
    JEL: I2 O5 Z1
    Date: 2016–07
  4. By: Dalibor Gottwald (University of Pardubice); Libor Švadlenka (University of Pardubice); Hana Pavlisová (Palacký University in Olomouc)
    Abstract: Postal e-services and human capital as a part of intellectual capital are currently two much discussed concepts in the context of developing countries. This paper uses Human Capital Index (HCI) and Postal E-services index (PES index) in order to analyze the level of development of developing countries and to point to the inaccuracy of the developed/developing classification of the World Bank. The paper has two objectives: to discover whether there is a statistical dependence between human capital and postal e-services in developing countries as it is in developed countries, and to create a new subgroup of " more developed " developing countries where this dependence confirms. Results of this paper document that there is a great diversity among developing countries and that additional subgroups may be defined within the rather broad classification of the World Bank, which is based on the GNI per capita indicator only. Human capital is being under scrutiny in numerous contexts but not yet in the context of postal e-services. Our paper presents a new method of analyzing the level of development and widens the range of aspects that must be taken into consideration when implementing measures to promote development.
    Keywords: developing countries,Africa,Asia,human capital,e-services
    Date: 2016
  5. By: Borissov, Kirill (European University of St. Petersburg); Bosi, Stefano (University of Evry); Ha-Huy, Thai (University of Evry); Modesto, Leonor (Universidade Catolica Portuguesa, Lisbon)
    Abstract: We extend the Lucas' 1988 model introducing two classes of agents with heterogeneous skills, discount factors and initial human capital endowments. We consider two regimes according to the planner's political constraints. In the first regime, that we call meritocracy, the planner faces individual constraints. In the second regime the planner faces an aggregate constraint, redistributing. We find that heterogeneity matters, particularly with redistribution. In the meritocracy regime, the optimal solution coincides with the BGP found by Lucas (1988) for the representative agent's case. In contrast, in the redistribution case, the solution for time devoted to capital accumulation is never interior for both agents. Either the less talented agents do not accumulate human capital or the more skilled agents do not work. Moreover, social welfare under the redistribution regime is always higher than under meritocracy and it is optimal to exploit existing differences. Finally, we find that inequality in human capital distribution increases in time and that, in the long run, inequality always promotes growth.
    Keywords: human capital, heterogeneous skills
    JEL: J24 O15 O40
    Date: 2016–07
  6. By: Quaas, Martin F.; Bröcker, Johannes
    Abstract: We develop an overlapping generations endogenous growth model with stocks of produced capital, human capital, a non-renewable resource, and irreversibly accumulated greenhouse gases in deterministic and stochastic versions. The model allows for analyzing different elasticities of substitution. We present a full analytical solution and characterization of the transition dynamics. We show that, as a rule of thumb, the social cost of carbon grow at a rate equal to the economy's growth rate divided by the elasticity of substitution. We analytically study sensitivity of the social cost of carbon with respect to key parameters: the intergenerational discount rate, the elasticity of substitution, and climate uncertainty. We show that the social cost of carbon explode at a finite level of log-normally distributed climate uncertainty. We illustrate results in a calibrated version of the model.
    Keywords: overlapping generations,substitutes vs. complements,stochastic resource dynamics,optimum growth,climate policy
    JEL: Q54 O44 Q32
    Date: 2016
  7. By: Chirwa, Themba Gilbert; Odhiambo, Nicholas Mbaya
    Abstract: This paper aims to empirically investigate the relevance of exogenous growth models in explaining economic growth in three Southern African countries, using the recently developed ARDL bounds-testing approach. Furthermore, the relevance of the convergence hypothesis in these study countries is tested using an extended exogenous growth model. The study results reveal that the predictions of the Solow and augmented Solow growth models are consistent in the three study countries, and that the convergence hypothesis holds. However, when additional factors are taken into account in exogenous growth models, the response of income per capita due to changes in investment and human capital development is slow in economies with low income per capita, such as Malawi and Zambia, compared to South Africa, which is ranked as an economy with a high income per capita. This study has important policy implications in these study countries. These implications include the need for policy makers to ensure that macroeconomic stability is encouraged by reducing government consumption, inflation, and population growth; and by promoting trade in order to allow for the diffusion of technologies from abroad.
    Keywords: Keywords: Exogenous Growth Models; Autoregressive Distributed Lag Model; Economic Growth; Malawi; Zambia; South Africa
    Date: 2016–07
  8. By: Bharat Diwakar; Gilad Sorek
    Abstract: We study the implications of patents breadth and duration (length) to growth and welfare, in an overlapping generations economy of finitely living agents. This demographic structure gives room to inter-generational trade in old patents and life-cycle saving motive, which prove to be relevant to the implications of different patent-policy dimensions. Patent breadth protection affects life-cycle saving and thereby aggregate investment, and the allocation investment between patents and physical capital. Patents duration affects also the stock of, and trade in, old patents. We show that, these unique characteristics of the OLG economy provide a case for incomplete patent breadth protection and finite patent duration, which are both growth and welfare enhancing. Furthermore, we show that the implications of patent policy to growth depend on whether the differentiated inputs are intermediate goods or investment goods. Our results contrast with the ones derived in previous studies that employed the same technologies and preferences in model economies of infinitely living agents. Hence, this work highlights the importance of the assumed demographic structure to the implications of patent policy.
    Keywords: IPR; Patent length; Patent Breadth; Growth; OLG
    JEL: L16 O30
    Date: 2016–07

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