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on Economic Growth |
| By: | Oded Galor (Brown University); Ömer Özak (Southern Methodist University); Assaf Sarid (Brown University) |
| Abstract: | This research explores the economic causes and consequences of language structures. It advances the hypothesis and establishes empirically that variations in pre-industrial geographical characteristics that were conducive to higher return to agricultural investment, larger gender gap in agricultural productivity, and more hierarchical society, are at the root of existing cross-language variations in the presence of the future tense, grammatical gender, and politeness distinctions. Moreover, the research suggests that while language structures have largely reflected the coding of past human experience and in particular the range of ancestral cultural traits in society, they independently affected human behavior and economic outcomes. |
| Keywords: | Comparative Development, Cultural Evolution, Language Structure, Future Tense, Politeness Distinctions, Grammatical Gender, Human Capital, Education |
| JEL: | I25 J24 O1 O10 O11 O12 O40 O43 O44 Z10 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:smu:ecowpa:1609&r=gro |
| By: | Caprettini, Bruno; Voth, Hans-Joachim |
| Abstract: | Can the adoption of labor-saving technology lead to social instability and unrest? We examine a canonical historical case, the so-called 'Captain Swing' riots in 1830s Britain. Variously attributed to the adverse consequences of weather shocks, the shortcomings of the Poor Law, or the after-effects of enclosure, we emphasize the importance of a new technology - the threshing machine. Invented in the 1780s, it spread during and after the Napoleonic Wars. Using farm advertisements from newspapers published in 66 English and Welsh towns, we compile a new measure of the technology's diffusion. Parishes with ads for threshing machines had much higher riot probabilities in 1830 - and the relationship was even stronger for machine-breaking attacks. Threshing machines were mainly useful in wheat-growing areas. To establish a causal role for labor-saving technology, we instrument technology adoption with the FAO measure of soil suitability for wheat, and show that this in turn predicts unrest. |
| Keywords: | Labor-saving technology; social instability; riots; welfare support; agricultural technology; factor prices and technological change. |
| JEL: | J21 J43 N33 P16 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11800&r=gro |
| By: | Ken Tabata (School of Economics, Kwansei Gakuin University) |
| Abstract: | This paper examines how population aging caused by a decline in the birth rate or a reduction in the mortality rate affects economic growth in an overlapping generations model with a general demographic structure and a sizable unfunded social security system. Through numerical simulations, we show that a decline in the birth rate has non-monotonic effects on economic growth, yielding a hump-shaped relationship between the population growth rate and the economic growth rate, whereas a reduction in the mortality rate has a monotonic positive effect on economic growth, yielding a monotonic positive relationship between the population growth rate and the economic growth rate. We also use our model to study how predicted and occurring demographic changes in Japan affect that country’s economic growth rate. We show that the growth effect of the predicted demographic changes in Japan is initially positive but it may turn out to be negative from the mid 2030s forward. This paper also examines the growth and welfare effects of a reduction in pension payments or an extension of the retirement age, and shows that the pension payment reduction policy is better than the retirement extension policy for both growth and welfare in response to population aging. |
| Keywords: | Population aging, Unfunded social security, Retirement age, Economic growth |
| JEL: | D91 H55 O41 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:kgu:wpaper:155&r=gro |
| By: | Murat Iyigun; Nathan Nunn; Nancy Qian |
| Abstract: | We investigate the long-run effects of cooling on conflict. We construct a geo-referenced and digitized database of conflicts in Europe, North Africa, and the Near East from 1400-1900, which we merge with historical temperature data. We show that cooling is associated with increased conflict. When we allow the effects of cooling over a fifty-year period to depend on the extent of cooling during the preceding period, the effect of cooling on conflict is larger in locations that experienced earlier cooling. We interpret this as evidence that the adverse effects of climate change intensify with its duration. |
| JEL: | N43 N53 O13 P16 Q34 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23033&r=gro |
| By: | Ortuño, Ignacio; Gomes, Joseph; Desmet, Klaus |
| Abstract: | This paper theoretically analyzes and empirically investigates the importance of local interaction between individuals of different linguistic groups for the provision of public goods at the national level. Depending on whether local interaction mitigates or reinforces antagonism towards other groups, the micro-founded theory we develop predicts that a country's provision of public goods (i) decreases in its overall linguistic fractionalization, and (ii) either increases or decreases in how much individuals locally learn about other groups. After constructing a 5 km by 5 km geographic dataset on language use for 223 countries, we compute measures of overall fractionalization and local learning, and investigate their relation to public good provision at the country level. While overall fractionalization worsens outcomes, we find a positive causal relation between local learning and public goods. Local mixing therefore mitigates the negative impact of a country's overall linguistic fractionalization. An IV strategy shows that this result is not driven by the possible endogenous spatial distribution of language speakers within countries. |
| Keywords: | Local interaction; Public goods; Diversity |
| JEL: | D82 J15 H5 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:23940&r=gro |
| By: | Ufuk Akcigit; John Grigsby; Tom Nicholas |
| Abstract: | We examine the golden age of U.S. innovation by undertaking a major data collection exercise linking historical U.S. patents to state and county-level aggregates and matching inventors to Federal Censuses between 1880 and 1940. We identify a causal relationship between patented inventions and long-run economic growth and outline a basic framework for analyzing key macro and micro-level determinants. We find a positive relationship between innovation and drivers of regional performance including population density, financial development and geographic connectedness. We also explore the impact of social structure measured by slavery and religion. We then profile the characteristics of inventors and their life cycle finding that inventors were highly educated, positively selected through exit early in their careers, made time allocation decisions such as delayed marriage, and tended to migrate to places that were conducive to innovation. Father's income was positively correlated with becoming an inventor, though not when controlling for the child's education. We show there were strong financial returns to technological development. Finally, we document an inverted-U shaped relationship between inequality and innovation but also show that innovative places tended to be more socially mobile. Our new data help to address important questions related to innovation and long-run growth dynamics. |
| JEL: | N11 N12 O31 O40 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23047&r=gro |
| By: | Henry Willebald (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Javier Juambeltz (Universidad del Trabajo del Uruguay (Uruguay). Ingeniería Tecnológica) |
| Abstract: | Settler economies (Argentina, Australia, Canada, Chile, New Zealand, South Africa and Uruguay) benefited from the consequences of the Second Industrial Revolution as their temperate climate and fertile soils were especially suitable for the production of meat, wheat, wool and other commodities. The main domestic contribution to economic growth was the incorporation of “new” land, of variable quality, into the commercial and productive relationships of the first expansion of the world capitalism. Therefore our aim is to understand this process in the long-run (1830-1950) using the land frontier expansion as pivotal concept. Initially, we discuss the economic theories about the role of land in the economic activity and then, present an analytical model based on the classical Ricardian view to explain the land frontier expansion in terms of extensive and intensive margins in the agrarian production. Our empirical strategy uses a quantification method based on Geographic Information Systems (GIS) and we consider different agrarian land aptitudes and distances to centres of gravity to test our hypotheses. Our evidence supports the predominance of the extensive margin in the land frontier expansion of Argentina, Uruguay and New Zealand and the intensive margin in the two first economies and Chile but not in the other members of the “club”. |
| Keywords: | settler economies, land frontier expansion, GIS, land quality |
| JEL: | N5 N9 O13 Q24 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-08-16&r=gro |
| By: | Thomas Grjebine; Fabien Tripier |
| Abstract: | This paper proposes a new methodology to assess the long-run relationship between economic and financial growth. By linking long-run growth to the properties of business cycles, this methodology offers a better understanding of the channels through which finance can impact long-term growth. We first define the direct elasticity between financial and economic growth to measure the contemporaneous effect of financial growth. If financial booms make recessions more severe, losses of growth during recessions are low when compared with growth supplements during expansions. Beyond this contemporaneous effect of financial booms, we identify a persistent effect of financial growth detrimental to subsequent cycles, which is referred as a hysteresis phenomenon. Then, financial and economic growth rates are positively correlated only up to a certain threshold of financial activity. In our panel of economies, the average level of financial activity is well above this threshold, implying that the total elasticity between finance and growth is negative in the long run. |
| Keywords: | Growth;Business Cycles;Hysteresis;Financial Cycles;Growth Cycles |
| JEL: | E32 E44 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2016-28&r=gro |
| By: | Ahad, Muhammad; Khan, Wali |
| Abstract: | This research investigates the relationship between globalization, environment degradation, industrial production, energy consumption and economic growth over the period of 1972-2015 for Bangladesh. The long run relationship between variables is examined using ARDL bound test and combined cointegration approach. These cointegration approaches predict the long run relationship between underlying variables. The empirical findings demonstrate that globalization, industrial production and energy consumption drives environmental degradation positively, but economic growth pushes environmental degradation negatively in the long run as well as short run. Further, the direction of causality is examined by VECM Granger causality which shows bidirectional causality between energy consumption and environment degradation, economic growth and environment degradation, industrial production and economic growth, and energy consumption and economic growth for both short-long run. Our results suggest a unidirectional causality runs from environmental degradation and energy consumption to industrial production. The empirics of Innovative Accounting Approach (IAA) confirm the findings of VECM Granger causality. Our findings suggest that Policymakers may focus on imports of advance technology and export led growth strategy to control environmental pollution. |
| Keywords: | Globalization, Environment Degradation, Bangladesh |
| JEL: | F64 Q4 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76278&r=gro |