nep-gro New Economics Papers
on Economic Growth
Issue of 2016‒08‒21
six papers chosen by
Marc Klemp
Brown University

  1. Gender Relations and Economic Development: Hypotheses about the Reversal of Fortune in EurAsia By Alexandra M. de Pleijt; Jan Luiten van Zanden; Sarah Guilland Carmichael
  2. Is Inequality Harmful for Innovation and Growth? Price versus Market Size Effects By Foellmi, Reto; Zweimüller, Josef
  3. Inequality, Technical Change or Leverage? By Goren, Amir
  4. Gender, Institutions, and Economic Development: Findings and Open Research and Policy Issues By Stephan Klasen
  5. Fertility, Longevity, and Capital Flows By Nicolas Coeurdacier
  6. Endogenous Growth Theory and Models: the “First Wave”, 1952–1973 By Stephen E. Spear; Warren Young

  1. By: Alexandra M. de Pleijt; Jan Luiten van Zanden; Sarah Guilland Carmichael
    Abstract: This paper develops an interrelated set of hypotheses about the links between gender relations, family systems and economic development in EurAsia. Firstly, we briefly discuss a number of ideas from the recent literature about the links between gender relations and economic development. Secondly, we suggest a measure of historic gender relations via the classification and measurement of historical family systems, and offer a set of maps of the institutions concerning marriage, inheritance and family formation that determine the degree of agency that women enjoyed at the micro level. Thirdly, we discuss the possible explanation of the genesis of the EurAsian pattern in family systems and gender relations as a by-product of the spread of agriculture and the process of ancient state formation that followed the Neolithic Revolution 10,000 years ago. Finally, we link these patterns in family systems and female agency to economic growth after 1500. We empirically demonstrate that high female agency was related to per capita GDP between 1800 and 2000. The Ôreversal of fortuneÕ that happened within EurAsia between 1000 and 2000, whereby the ancient centers of state formation and urbanization in the Middle East, India and China were overtaken by regions at the margin of the continent (Western Europe, Japan, Korea), can in our view be linked to this spatial pattern in gender relations and family systems found there (and reconstructed here).
    Keywords: Female agency, Economic growth, Family systems, Reversal of fortune.
    Date: 2016–08
  2. By: Foellmi, Reto; Zweimüller, Josef
    Abstract: We introduce non-homothetic preferences into an R&D based growth model to study how demand forces shape the impact of inequality on innovation and growth. Inequality affects the incentive to innovate via a price effect and a market size effect. When innovators have a large productivity advantage over traditional producers a higher extent of inequality tends to increase innovators' prices and mark-ups. When this productivity gap is small, however, a redistribution from the rich to the poor increases market sizes and speeds up growth.
    Keywords: Inequality, Growth, Demand Composition, Price Distortion
    JEL: O15 O31 D30 D40 L16
    Date: 2016–07
  3. By: Goren, Amir
    Abstract: Exploring the determinants of growing income inequality, I show how constant capital income shares and inequality can be explained without technical change. I show why despite the fact that technical change is capital augmenting, rather than labor augmenting, it may not be sufficient to explain the last few decades of growing capital share of income and inequality due to the balancing mechanism of depreciation. Finally, I show how the growth of leverage, which coincided with the growth of inequality, can explain the growth of capital share of income and inequality. I introduce a simple model of leverage and business cycle and show how leverage is justified by more leverage and how depressed interest rate allows leveraging and inequality growth to persist.
    Keywords: Inequality, Technical Change, Leverage, Credit, Business Cycle
    JEL: E00 E10 E13 E32
    Date: 2016–08–10
  4. By: Stephan Klasen (Georg-August University Göttingen)
    Abstract: Gender relations are a key institution governing important aspects of production and reproduction of societies. They are guided by formal institutions as well as informal norms and values. As this survey shows, there is great regional heterogeneity in gender inequality in formal and informal social institutions. The literature on long‐term drivers of gender gaps suggests that those gender gaps are related to long‐standing and regularly reproduced gender norms and values related to differences in women's economic opportunities and constraints. The paper also shows that these gender gaps not only affect gender equity but overall development outcomes such as economic growth and reductions in mortality. This is best documented in the case of gender gaps in education but there is also evidence for the negative effects gender of gaps in employment, political and economic empowerment, access to resources, and social institutions on development outcomes. The paper then shows that there has been a large and heterogeneous change in gender gaps. While gender gaps in education (and legal rights) have closed very rapidly, gender gaps in labor force participation, health, political participation, and time use have closed much less rapidly, and there has been virtually progress in reducing occupational and sectoral segregation, unexplained gender pay gaps, and violence against women. The paper presents some hypotheses that might explain this differential performance and also contribute to understanding regional dynamics, before pointing towards a forward‐looking research agenda on better understanding the linkages between institutions and their change, gender inequality, and economic development.
    Keywords: gender; institutions; economic development
    JEL: D63 J71 O15
    Date: 2016–08–09
  5. By: Nicolas Coeurdacier (SciencesPo)
    Abstract: The neoclassical growth model predicts large capital flows towards fast-growing emerging countries. We show that incorporating fertility and longevity into a lifecycle model of savings changes the standard predictions when countries differ in their ability to borrow inter-temporally and across generations through social security. In this environment, global aging triggers capital flows from emerging to developed countries, and countries’ current account positions respond to growth adjusted by current and expected demographic composition. Data on international capital flows are broadly supportive of the theory. The fact that fast-growing emerging countries are also aging faster, while having less developed credit markets and pension systems, explains why they are more likely to export capital. Our quantitative multi-country overlapping generations model explains a significant fraction of the patterns of capital flows, across time and across developed and emerging countries.
    Date: 2016
  6. By: Stephen E. Spear; Warren Young (Bar-Ilan University)
    Abstract: In previous papers (Spear and Young 2014, 2015a, 2015b), we surveyed the origins, evolution and dissemination of optimal growth, two sector and turnpike, and stochastic growth models. In this paper, we focus on endogenous growth theory and models. However, in contrast to our previous findings regarding optimal growth theory and its offshoots, which exhibited fairly direct lines of conceptual development, the endogenous growth story, as will be seen, is multifaceted, with a more complex pattern of intellectual evolution.
    Date: 2016–05

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