|
on Economic Growth |
| By: | Ani Harutyunyan; Omer Ozak |
| Abstract: | This research explores the effects of culture on technological diffusion and economic development. It shows that culture’s direct effects on development and barrier effects to technological diffusion are, in general, observationally equivalent. In particular, using a large set of measures of cultural values, it establishes empirically that pairwise differences in contemporary development are associated with pairwise cultural differences relative to the technological frontier, only in cases where observational equivalence holds. Additionally, it establishes that differences in cultural traits that are correlated with genetic and linguistic distances are statistically and economically significantly correlated with differences in economic development. These results highlight the difficulty of disentangling the direct and barrier effects of culture, while lending credence to the idea that common ancestry generates persistence and plays a central role in economic development. |
| Keywords: | Comparative economic development, economic growth, culture, barriers to technological diffusion, genetic distances, linguistic distances |
| JEL: | O10 O11 O20 O33 O40 O47 O57 Z10 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:38216&r=gro |
| By: | Filipe Campante; David Yanagizawa-Drott |
| Abstract: | We study the impact of international long-distance flights on the global spatial allocation of economic activity. To identify causal effects, we exploit variation due to regulatory and technological constraints which give rise to a discontinuity in connectedness between cities at a distance of 6000 miles. We show that these air links have a positive effect on local economic activity, as captured by satellite-measured night lights. To shed light on how air links shape economic outcomes, we first present evidence of positive externalities in the global network of air links: connections induce further connections. We then find that air links increase business links, showing that the movement of people fosters the movement of capital. In particular, this is driven mostly by capital flowing from high-income to middle-income (but not low-income) countries. Taken together, our results suggest that increasing interconnectedness generates economic activity at the local level by inducing links between businesses, but also gives rise to increased spatial inequality locally, and potentially globally. |
| JEL: | F15 F21 F23 F63 O11 O18 O19 O47 R11 R12 R40 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22653&r=gro |
| By: | Bloom, David E.; Kuhn, Michael; Prettner, Klaus |
| Abstract: | We analyze the economic consequences for less developed countries of investing in female health. We do this through developing and calibrating a novel micro-founded dynamic general equilibrium model in which parents trade off the number of children against investments in their education and in which we allow for health-related gender differences in productivity. We show that better female health speeds up the demographic transition and thereby the take-off toward sustained economic growth. By contrast, male health improvements delay the transition and take-off because ceteris paribus they raise fertility. Investing in female health is therefore a potent lever for promoting development. |
| Keywords: | economic development,educational transition,female health,fertility transition,quality-quantity trade-off |
| JEL: | O11 I15 I25 J13 J16 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hohdps:112016&r=gro |
| By: | Ho, Chi Pui |
| Abstract: | Rise of Women, industrialization and demographic transition are integral components in a nation’s development. We posit a two-sector unified growth model with endogenous female empowerment to study the interrelationship between women and development. Female empowerment would hamper fertility, lower agricultural employment share, and decelerate development; development that checks fertility would raise female labor-force participation and women’s (economic) power. Our model reconciles French development process during AD1400-AD2100, including women’s distinctive fall-and-rise socio-economic status, absence of a Post-Malthusian regime, fertility control and innovation’s roles in modern growth. We also study the implications for policies promoting gender equality and innovation in Madagascar today. |
| Keywords: | Female Empowerment; Women’s Economic History; French Economic History; Unified Growth Theory |
| JEL: | E10 N10 O5 |
| Date: | 2016–09–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:73864&r=gro |
| By: | Ho, Chi Pui |
| Abstract: | We develop a unified growth theory for the Western Hemisphere during the colonization era. We posit a unified growth model with transatlantic migration and slavery trade to reconcile development in the Thirteen Colonies/United States during AD1700-AD1860. Then we apply the model across American regions/countries, and propose the GeoPopulation-Institution hypothesis to explain divergence: whenever its geographic or political environments relatively favored the buildup of Black slaves (or non-White forced labor), through slavery institution that disincentivized the Blacks to make improvements, a region/country was likely to suffer a reversal of fortune. Geography, population and institution are inseparable in understanding American economic history. |
| Keywords: | GeoPopulation-Institution Hypothesis; American Economic History; Reversal of fortune; Unified Growth Theory; Transatlantic Migration and Slavery Trade |
| JEL: | E10 N10 O5 |
| Date: | 2016–09–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:73863&r=gro |
| By: | Tsangyao Chang (Feng Chia University); Hsiao-Ping Chu (Feng Chia University); Frederick W. Deale (University of Pretoria); Rangan Gupta (University of Pretoria); Stephen M. Miller (University of Nevada, Las Vegas and University of Connecticut) |
| Abstract: | This paper examines the linkages between population growth and standard-of-living growth in 21 countries over the period of 1870-2013. We apply the bootstrap panel causality test proposed by Kónya (2006), which accounts for both dependency and heterogeneity across countries. We find one-way Granger causality running from population growth to standard-of-living growth for Finland, France, Portugal, and Sweden, one-way Granger causality running from standard-of-living growth to population growth for Canada, Germany, Japan, Norway and Switzerland, two-way causality for Austria and Italy, and no causal relationship for Belgium, Brazil, Denmark, Netherlands, New Zealand, Spain, Sri Lanka, the UK, the USA, and Uruguay. Dividing the sample into two subsamples due to a structural break yields different results over the two periods of 1871-1951 and 1952-2013. Our empirical results suggest important policy implications for these 21 countries as the directions of causality differ across countries and time period. |
| Keywords: | Population Growth; Standard-of-Living Growth; Dependency and Heterogeneity; Bootstrap Panel Causality Test |
| JEL: | C32 C33 O40 Q56 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2016-17&r=gro |
| By: | Howard Bodenhorn |
| Abstract: | Do efficient financial markets and institutions promote economic growth? Have they done so in the past? In this essay, to be included in the Handbook of Finance and Development (edited by Thorsten Beck and Ross Levine), I survey a large and diverse historical literature that explores the connection between finance and growth in US history. The US financial system was important in mobilizing savings, allocating capital, exerting corporate control, and mitigating borrower opportunism. US finance was characterized by a wide variety of intermediaries – commercial banks, savings banks, building and loan associations, mortgage companies, investment banks and securities markets – that emerged to fill specific financial niches, compete with and complement the activities of existing intermediaries. The weight of the evidence is consistent with the interpretation that finance facilitated and encouraged growth. Despite the breadth and diversity of approaches, there remain many potentially fruitful lines of further inquiry. |
| JEL: | G2 N2 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22652&r=gro |
| By: | Ho, Chi Pui |
| Abstract: | We develop a unified growth theory with Industrious Selection to explain the Five Revolutions in the development process (Agricultural Revolution, Structural Transformation, Industrial Revolution, Industrious Revolution, Demographic Revolution) and the Two Divergences in Eurasia (Little Divergence, Great Divergence) in AD0-AD2000. Industrious Selection refers to industrious (hardworking and cooperative) individuals gradually dominating the population composition through labor-leisure optimization and income effect on births. It raises working hours, improves production efficiency and accelerates development. The Black Death expedited Industrious Selection in late-Medieval Europe. Together with the population scale effect, the theory reconciles the British development process and Eurasian economic divergence during AD0-AD2000. |
| Keywords: | Industrious Selection; Eurasian Economic History; Unified Growth Theory |
| JEL: | E10 N10 O5 |
| Date: | 2016–09–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:73862&r=gro |
| By: | Baris Alpaslan; Abdilahi Ali |
| Abstract: | This paper extends a two-period Overlapping Generations model of endogenous growth where the interactions between public infrastructure, human capital with R&D activities, and growth are studied. The paper makes two important contributions. First, it accounts for the spillover effect of the stock of ideas on learning which in turn promotes the production of innovative technologies. In doing so, it brings to the fore a two-way interaction between human capital and innovation. The paper then applies various econometric methods which confirm the above theoretical thesis. Second, the solutions of the model emphasise the important role public spending on infrastructure, human capital and R&D can play in promoting economic growth. In order to study the transitional dynamics of the model and to illustrate the impact of public policy, the model is calibrated using the average data for low-income countries and a sensitivity analysis is reported under different parameter configurations. The findings of the numerical analysis show that trade-offs in the allocation of public spending may inevitably emerge. In particular, investment in public infrastructure at the expense of spending on R&D is less likely to succeed in promoting economic growth, whereas it may be more effective to foster growth through an offsetting cut in another productive component, namely, education. In light of these potential trade-offs, governments in low-income countries need to use their limited budgets as part of holistic measures in order to achieve efficient outcomes. |
| Keywords: | Infrastructure, Human Capital, Innovation, Government Policy |
| JEL: | H54 J24 O31 O38 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2016-59&r=gro |
| By: | J. Silvestre,; T. Araújo; M. St. Aubyn |
| Abstract: | Macro and micro-economic perspectives are combined in an economic growth model. An agent-based modeling approach is used to develop an overlapping generation framework where endogenous growth is supported by workers that decide to study depending on their relative (skilled and unskilled) indi- vidual satisfaction. The micro perspective is based on individual satisfaction: an utility function computed from the variation of the relative income in both space and time. The macro perspective emerges from micro decisions, and, as in other growth models of this type, concerns an important allocative social decision the share of the working population that is engaged in producing ideas (skilled workers). Simulations show that production and satisfaction levels are higher when the evolution of income measured in both space and time are equally weighted. Key Words : agent modeling, education, heterogeneous human capital, economic growth, individual satisfaction. |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp192016&r=gro |
| By: | Hof, Franz X.; Prettner, Klaus |
| Abstract: | We analyze the impact of status preferences on technological progress and long-run economic growth within an R&D-based framework. For this purpose, we extend the standard relative wealth approach by allowing the various assets held by households to differ with respect to their status relevance. Relative wealth preferences imply that the effective rate of return on saving in the form of a particular asset is the sum of its market rate of return and its status-related extra return. We show that the status relevance of shares issued by entrants to finance the purchase of new technologies is of crucial importance for long-run growth: First, an increase in the intensity of the quest for status raises the steady-state economic growth rate only if the status-related extra return of these shares is strictly positive. Second, for any given degree of status consciousness, the long-run economic growth rate depends positively on the relative status relevance of shares issued by entrants. Third, while the decentralized long-run economic growth rate is less than its socially optimal counterpart in the standard model, wealth externalities reduce this distortion. |
| Keywords: | status concerns,relative wealth,technological progress,long-run economic growth,social optimality |
| JEL: | D31 D62 O10 O30 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hohdps:122016&r=gro |
| By: | Stefano Bosi (EPEE (University of Evry)); Ngoc-Sang Pham (LEM (University of Lille 3) and EPEE (University of Evry)) |
| Abstract: | We study the interplay between taxation, bubble formation and eco- nomic growth. A rational bubble may be beneficial when growth is fu- elled by public investment (or R&D externalities) and the government levies taxes on bubble returns to finance this investment. Our main result challenges the conventional view about the negative effect of bubbles in endogenous growth (Grossman and Yanagawa, 1993). |
| Keywords: | taxation on financial revenue, public R&D, endogenous growth |
| JEL: | E44 H23 O30 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:eve:wpaper:16-03&r=gro |
| By: | Makuyana, Garikai; Odhiambo, Nicholas Mbaya |
| Abstract: | This study performs an examination on the impact of public and private investment on economic growth in Zimbabwe from 1970 to 2014. In addition to estimating the economic growth model, the study also estimates the crowding effect of public investment on private investment. The study utilised the newly developed ARDL-bounds testing approach with better small sample properties than the traditional cointegration techniques. The results show that while public investment has higher short-run impact on economic growth than private investment, in the long run, private investment contributed more to economic growth than public investment. In addition, the results reported the crowding-in effect on private investment of infrastructural public investment in the long run and gross public investment in the short run. Furthermore, the results found the crowding-out effect on private investment of gross public investment in the long run and non-infrastructural public investment in the short run. The results suggest that the short-run and long-run contribution to economic growth of private investment in Zimbabwe can be improved by cutting back on non-infrastructural public investment to necessary minimum level while stimulating the growth in infrastructural public investment. |
| Keywords: | Zimbabwe; Public and Private Investment; Crowding Effect; Economic Growth; |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:uza:wpaper:21378&r=gro |
| By: | Chen, Daniel L.; Yeh, Susan |
| Abstract: | Is it justified for states to appropriate private property rights? If so, should governments expropriate or regulate?We test three conventional views: insecure property rights cause underinvestment, moral hazard cause overinvestment, or public use cause economic growth.We embed these mechanisms in a model and measure them using the random assignment of U.S. federal court judges setting geographicallylocal precedent. For a half-century, racial minority Democrats were more likely to strike down government appropriations while Republican former federal prosecutors were more likely to uphold them. We find that pro-government physical takings precedent stimulated subsequent takings, expropriation of larger parcels, highway construction, and growth in construction, transportation, and government sectors as well as agriculture, retail, and financial sectors, overall economic growth, and property values. However, racial minorities were increasingly displaced, unemployed, and living in public housing, and the service sector declined. Pro-government regulatory takings precedent also spurred economic growth and property values, but did not increase displacement or racial inequality. |
| Keywords: | Property rights, displacement, regulation, takings |
| JEL: | K11 R38 R52 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:tse:iastwp:30835&r=gro |