nep-gro New Economics Papers
on Economic Growth
Issue of 2017‒04‒09
ten papers chosen by
Marc Klemp
Brown University

  1. Geographical Origins and Economic Consequences of Language Structures By Assaf Sarid; Oded Galor
  2. The love for children hypothesis and the multiplicity of fertility rates. By Paolo Melindi Ghidi; Thomas Seegmuller
  3. Spatial externalities and growth in a Mankiw-Romer-Weil world: Theory and evidence By Fischer, Manfred M.
  4. From wood to coal: Directed technical change and the British Industrial Revolution By John C. V. Pezzey; David I. Stern; Yingying Lu
  5. Natural Resources and Export Concentration: On the Most Likely Casualties of Dutch Disease By Dany Bahar; Miguel Angel Santos
  6. The Causal Impact of Human Capital on R&D and Productivity: Evidence from the United States By Verónica Mies; Matías Tapia; Ignacio Loeser
  7. The impact of growth on unemployment in a low vs. a high inflation environment By Tesfaselassie, Mewael F.; Wolters, Maik H.
  8. Fossil fuels, alternative energy and economic growth By Raul Barreto
  9. The Nexus between Infrastructure (Quantity and Quality) and Economic Growth By Chengete Chakamera; Paul Alagidede
  10. Why is Growth better in the United States than in other Industrial Countries By Martin S. Feldstein

  1. By: Assaf Sarid (Department of Economics, University of Haifa); Oded Galor (Department of Economics, 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 returns to agricultural investment, gender gaps in agricultural productivity, and the emergence of hierarchical societies, are at the root of existing cross-language variations in the structure of the future tense and the presence of grammatical gender and politeness distinctions. Moreover, the research suggests that while language structures have largely re ected past human experience and ancestral cultural traits, they have independently a ected human behavior and economic outcomes.
    Keywords: Comparative Development, Cultural Evolution, Language Structure, Future Tense, Po- liteness Distinctions, Grammatical Gender, Human Capital, Education
    JEL: D01 D03 J16 Z10 Z13
  2. By: Paolo Melindi Ghidi; Thomas Seegmuller
    Abstract: As illustrated by some French departments, how can we explain the existence of equilibria with different fertility and growth rates in economies with the same fun苓amentals, preferences, technologies and initial conditions? To answer this question we develop an endogenous growth model with altruism and love for children. We show that independently from the type of altruism, a multiplicity of equilibria might emerge if the degree of love for children is high enough. We refer to this condition as the love for children hypothesis. Then, the fertility rate is determined by expec負ations on the future growth rate and the dynamics are not path-dependent. Our model is able to reproduce different fertility behaviours in a context of completed demographic transition independently from fundamentals, preferences, technologies and initial conditions.
    Keywords: Fertility, Love for Children, Expectations, Endogenous Growth, Balanced Growth Path.
    JEL: J13
    Date: 2017
  3. By: Fischer, Manfred M.
    Abstract: This paper presents a theoretical growth model that accounts for technological interdependence among regions in a Mankiw-Romer-Weil world. The reasoning behind the theoretical work is that technological ideas cannot be fully appropriated by investors and these ideas may diffuse and increase the productivity of other firms. We link the diffusion of ideas to spatial proximity and allow for ideas to flow to nearby regional economies. Through the magic of solving for the reduced form of the theoretical model and the magic of spatial autoregressive processes, the simple dependence on a small number of neighbouring regions leads to a reduced form theoretical model and an associated empirical model where changes in a single region can potentially impact all other regions. This implies that conventional regression interpretations of the parameter estimates would be wrong. The proper way to interpret the model has to rely on matrices of partial derivatives of the dependent variable with respect to changes in the Mankiw-Romer-Weil variables, using scalar summary measures for reporting the estimates of the marginal impacts from the model. The summary impact measure estimates indicate that technological interdependence among European regions works through physical rather than human capital externalities.
    Keywords: Spatial economics, spatial econometrics, growth empirics, human capital externalities, physical capital externalities, technological interdependence, European regions
    JEL: C31 O18 O47 R11 R15
    Date: 2016
  4. By: John C. V. Pezzey; David I. Stern; Yingying Lu
    Abstract: We build a directed technical change model of the British Industrial Revolution where one intermediate goods sector uses a fixed renewable energy ("wood") quantity, and another uses coal at a fixed price. With a high enough elasticity of substitution between the two goods in producing final output, an industrial revolution, where over time the coal-using sector grows relative to the wood-using sector and its growth accelerates, is not inevitable. However, greater initial scarcity of wood and/or higher population growth puts the economy on a path to an industrial revolution. The converse slows industrialization, or even prevents it forever.
    Keywords: British Industrial Revolution, directed technical change, renewable energy, coal, two-sector model, substitutability, population growth
    JEL: N13 N73 O33 O41 Q43
    Date: 2017–03
  5. By: Dany Bahar (Center for International Development at Harvard University); Miguel Angel Santos (Center for International Development at Harvard University)
    Abstract: The literature on Dutch disease is extensive when it comes to documenting the negative impacts of natural resource exports on non-resource tradable goods as an aggregate. Little has been said on the impact of natural resources on non-resource export concentration, either from a broad perspective or at the product level. We explore this relationship using a variety of non-resource export concentration indexes for the period 1985-2010. We find significant evidence indicating that countries with high share of natural resources in exports tend to have less diversified non-resource export baskets. Furthermore, using highly disaggregated data at the product level we study what type of products are more likely to thrive or suffer in resource rich countries. We find that capital intensive goods tend to have larger shares on the non-resource export basket when natural resources are high. We also find that homogeneous goods make for a larger share of the non-resource export basket the lower their technological sophistication. For differentiated goods the pattern is reversed: they tend to make for a larger share of the non-resource export basket, the higher they are in the technology scale.
    Keywords: Export diversification, Dutch disease, homogeneous products, heterogeneous products, skill intensity, capital intensity
    JEL: F14 F43 O11 O13 Q33
    Date: 2016–05
  6. By: Verónica Mies; Matías Tapia; Ignacio Loeser
    Abstract: This paper contributes to the empirical literature on the impact of human capital on technology adoption and the production structure of the economy by using census micro data aggregated at the state level data for US cohorts born between 1915 and 1939. We test the impact of secondary and tertiary schooling in the US at the state-cohort level on R&D and TFP growth across industries in 1970. While we follow the literature in using the variation in the timing of compulsory schooling laws across states to instrument secondary schooling, we propose a novel instrument for tertiary enrollment. In particular, we exploit, as in Acemoglu, Autor and Lyle (2004), the differences across states and cohorts in World War II mobilization rates. While Acemoglu, Autor, and Lyle (2004) used this variation as an exogenous shift in female labor supply, we exploit the fact that WWII veterans were benefited by the GI Bill Act (1944), which granted them free college education once they were discharged from service. This provides a clean source of variation in the costs of attending college, which allows us to exploit differences in college enrollment across states and cohorts. Our results suggest that, consistent with the initial discussion, different types of human capital are associated to different effects on the productive structure of the economy. Two-stage least squared regressions find no effect of the share of population with secondary schooling over outcomes such as R&D per worker or TFP growth. On the other hand, the share of population with tertiary education has a significant effect on both R&D per worker or TFP growth. In particular, a 1% increase in the share of workers with tertiary education increases R&D per worker by 1.8 percentage points, and annual TFP growth by 1% for 17 years. Creation-Date: 2015
    JEL: J14 O12 L26 M53
  7. By: Tesfaselassie, Mewael F.; Wolters, Maik H.
    Abstract: The standard search model of unemployment predicts, under realistic assumptions about household preferences, that disembodied technological progress leads to higher steady-state unemployment. This prediction is at odds with the 1970s experience of slow productivity growth and high unemployment in industrial countries. We show that introducing nominal price rigidity helps in reconciling the model's prediction with experience. Faster growth is shown to lead to lower unemployment when inflation is relatively high, as was the case in the 1970s. In general, the sign of the effect of growth on unemployment is shown to depend on the level of steady-state inflation. There is a threshold level of inflation below (above) which faster growth leads to higher (lower) unemployment. The prediction of the model is supported by an empirical analysis based on US and European data.
    Keywords: growth,trend inflation,unemployment
    JEL: E24 E31
    Date: 2017
  8. By: Raul Barreto
    Abstract: Present a theoretical framework of endogenous switching from fossil fuels to alternative energy driven by productivity differentials and consequent prices.General equilibrium endogenous growth framework and non-linear estimation of coefficients. The model depicts a hump shaped growth path that is analogous to a transition from energy rich "peak oil" heydey to alternative energy only world. The model thereby allows for quantitative comparisons of initial conditions, transition and terminal points along the growth path as well as determinants of alternative paths.
    Keywords: North country in North south type GE framework., Growth, Energy and environmental policy
    Date: 2015–07–01
  9. By: Chengete Chakamera; Paul Alagidede
    Abstract: This paper examines the growth effects of infrastructure stock and quality in Sub Saharan Africa (SSA). While previous studies established that the poor state of infrastructure in SSA slows economic growth, there is little evidence on infrastructure quality and a robust analysis on the causal links between infrastructure and economic growth. Using principal components analysis to cluster different infrastructure measures and examining the infrastructure-growth nexus in a Generalized Method of Moments while accounting for heterogeneity in a panel setting, our results reveal strong evidence of a positive effect of infrastructure development on economic growth with most contribution coming from infrastructure stock. The quality-growth effect is weak, thus giving credence to the combined effects of infrastructure stock and quality on growth, especially in regions with moderately high quality, and smaller in those with poorer quality. Among the disaggregated infrastructure components, electricity supply exerted the greatest downward pressure on growth in SSA. Lastly, we find evidence for a unidirectional causality from aggregate infrastructure to growth. A number of policy implications are discussed.
    Keywords: Infrastructure stock, Infrastructure quality, economic growth, Nexus, causality
    Date: 2017–03
  10. By: Martin S. Feldstein
    Abstract: Although the official statistics imply that the rate of growth of real GDP in the United States has declined in recent years, it has still been substantially higher than the real growth rates in Europe and the other industrial countries, leading to higher real per capita incomes. This paper discusses ten reasons for the higher rate of real economic growth.
    JEL: E6 E60
    Date: 2017–03

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