nep-gro New Economics Papers
on Economic Growth
Issue of 2017‒03‒19
five papers chosen by
Marc Klemp
Brown University

  1. On the Dispensability of New Transportation Technologies: Evidence from the Heterogeneous Impact of Railroads in Nigeria By Okoye, Dozie; Pongou, Roland; Yokossi, Tite
  2. Measuring Pro-Poor Growth in Egypt, Jordan, and Palestine By Ali Hashemi
  3. Capital Goods Trade, Relative Prices, and Economic Development By Mutreja, Piyusha; Ravikumar, B.; Sposi, Michael J.
  4. Political Instability, Uncertainty, Democracy, and Economic Growth in Egypt By Hossam ELdin Mohammed Abdelkader
  5. Algeria and the Natural Resource Curse: Oil Abundance and Economic Growth By Sidi Mohammed Chekouri; Abderrahim Chibi

  1. By: Okoye, Dozie; Pongou, Roland; Yokossi, Tite
    Abstract: Exploring heterogeneity in the impact of a technology is a first step towards understanding conditions under which this technology is conducive to economic development. This article shows that colonial railroads in Nigeria have large long-lasting impacts on individual and local development in the North, but virtually no impact in the South neither in the short run nor in the long run. This heterogeneous impact of the railway can be accounted for by the distance to ports of export. We highlight the fact that the railway had no impact in areas that had access to ports of export, thanks to their proximity to the coast and to their use of waterways, and that those areas barely adopted the railway as it did not reduce their shipping costs. Our analyses rule out the possibility that the heterogeneous impacts are driven by cohort effects, presence of major roads, early cities, or missionary activity, or by crude oil production.
    Keywords: Impact Heterogeneity, Colonial Investments, Railway, Africa, Long-run Effects, Development, Nigeria
    JEL: N3 N30 N37 N7 O1 O15 O18 R0
    Date: 2017–02–24
  2. By: Ali Hashemi (Ashland University, Ashland, OH)
    Abstract: This paper examines the pro-poorness of economic growth in Egypt, Jordan, and Palestine in the first decade of the twenty-first century. Based on Ravallion and Chen(2003)’s poverty reducing definition of pro-poorness which only requires reduction in poverty and ignores the distributional impact of growth, we characterize economic growth in all three countries throughout the decade as pro-poor, with the exception of Palestine during the first half of the decade. On the other hand, using Kakwani and Pernia (2000)’s definition which includes both poverty reduction and distributional aspects and characterizes a growth pattern as pro-poor only if it favors the poor, we find that only Egypt’s growth can be characterized as pro-poor for most combinations of poverty measures and poverty lines. Jordan’s growth, although remained high throughout the decade, can only be characterized as pro-poor in the second half of this period. Finally, neither Palestine’s economic downturn in the first half of the decade nor its following economic recovery in the second half can be characterized as pro-poor.
    Date: 2016–06
  3. By: Mutreja, Piyusha (Syracuse University); Ravikumar, B. (Federal Reserve Bank of St. Louis); Sposi, Michael J. (Federal Reserve Bank of Dallas)
    Abstract: International trade in capital goods has quantitatively important effects on economic development through capital formation and aggregate TFP. Capital goods trade enables poor countries to access more efficient technologies, leading to lower relative prices of capital goods and higher capital-output ratios. Moreover, poor countries can use their comparative advantage—non-capital goods production—and increase their TFP. We quantify these channels using a multisector, multicountry, Ricardian model of trade with capital accumulation. The model matches several trade and development facts within a unified framework. Frictionless trade in capital goods reduces the income gap between rich and poor countries by 40 percent. More than half of the reduction in the income gap is due to the TFP channel.
    Keywords: Income differences; Capital goods trade; Relative prices; Investment rate
    JEL: E22 F11 O11 O4
    Date: 2017–03–11
  4. By: Hossam ELdin Mohammed Abdelkader (Ain Shams University, Egypt)
    Abstract: This paper aims to determine if there is a relationship between political instability, uncertainty, and political regime, on the one hand, and economic growth in Egypt, on the other. According to the literature, there is a relationship between political regime and stability and economic performance. However, the empirical studies show different results for different regions, different countries, and different periods. Studies concerning the effect of political instability on economic growth are rich in the case of some countries, but are not for other developing countries, like Egypt. This paper tries to estimate the robust relationship between economic growth in Egypt and political instability, uncertainty, and political regime, and estimates their impact on the Egyptian economy during the last four decades. Furthermore, the paper tests the uncertainty impact, resulting from unstable political and economic conditions on economic growth in Egypt. Accordingly, time-series data are used from 1972 to 2013 under the cointegration approach to determine the short- and long-run relationships. Moreover, a GARCH model approach is used in Error-Correction Model (ECM) to introduce the uncertainty impact, and Pesaran’s bound test is used to confirm the results. Results assert the positive impact of the level of democracy on economic growth, while they assert the negative impact of uncertainty on economic growth. However, the impact of political instability on economic growth is ambiguous in the case of Egypt. The results are helpful for policymakers targeting Egypt’s economic growth in the short- and long-runs.
    Date: 2015–10
  5. By: Sidi Mohammed Chekouri (Faculty of Economics and Commerce, University of Tlemcen); Abderrahim Chibi
    Abstract: In this paper we examine the interaction between oil-export revenue and long-run economic growth in Algeria during the period from 1979 until 2013. Our empirical analysis shows that oil revenue has a positive effect on economic growth. This means that resource abundance in itself, as proxied by oil revenue, has been a blessing for the Algerian economy and its growth and development. Our empirical findings also suggest that there is a negative relationship between oil revenue volatility and economic growth in Algeria. This finding confirms that the source of the resource curse is the high volatility existing in oil revenues, rather than abundance of oil in itself, which is consistent with the empirical results in Esfahani et al. (2012) and Mohadees and Pesaran (2013). Therefore, this study identifies that oil abundance in Algeria has been both a blessing and a curse, this is major reason why it is important for Algeria to diversify its economy and improve the quality of its institutions in order to benefit more from their natural wealth and offset the negative volatility effects of oil revenue.
    Date: 2016–04

This nep-gro issue is ©2017 by Marc Klemp. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.