nep-gro New Economics Papers
on Economic Growth
Issue of 2017‒04‒23
six papers chosen by
Marc Klemp
Brown University

  1. Migrants and the Making of America: The Short- and Long-Run Effects of Immigration during the Age of Mass Migration By Sandra Sequeira; Nathan Nunn; Nancy Qian
  2. The Value of Biodiversity as an Insurance Device By Emmanuelle Augeraud-Véron; Giorgio Fabbri; Katheline Schubert
  3. Irrigation, Collectivism and Long-Run Technological Divergence By Johannes C. Buggle
  4. Technological Progress, Labour Productivity and Economic Growth: Disentangling the Negative and Positive Effects By MERTER MERT
  5. Intergenerational transfers, tax policies and public debt By Erwan MOUSSAULT
  6. Structural Reforms, Innovation and Economic Growth By Kosuke Aoki; Naoko Hara; Maiko Koga

  1. By: Sandra Sequeira; Nathan Nunn; Nancy Qian
    Abstract: We study the effects of European immigration to the United States during the Age of Mass Migration (1850-1920) on economic prosperity today. We exploit variation in the extent of immigration across counties arising from the interaction of fluctuations in aggregate immigrant flows and the gradual expansion of the railway network across the United States. We find that locations with more historical immigration today have higher incomes, less poverty, less unemployment, higher rates of urbanization, and greater educational attainment. The long-run effects appear to arise from the persistence of sizeable short-run benefits, including greater industrialization, increased agricultural productivity, and more innovation.
    JEL: N31 N32 N61 N62 N71 N72 N91 N92
    Date: 2017–03
  2. By: Emmanuelle Augeraud-Véron (Mathématiques, Image et Applications (MIA), Université de La Rochelle); Giorgio Fabbri (Aix-Marseille Univ. (Aix-Marseille School of Economics), CNRS, EHESS and Centrale Marseille); Katheline Schubert (Paris School of Economics, Université Paris 1 Panthéon-Sorbonne)
    Abstract: This paper presents a benchmark endogenous growth model including biodiversity preservation dynamics. Producing food requires land, and increasing the share of total land devoted to farming mechanically reduces the share of land devoted to biodiversity conservation. However, the safeguarding of a greater number of species is associated to better ecosystem services – pollination, flood control, pest control, etc., which in turn ensure a lower volatility of agricultural productivity. The optimal conversion/preservation rule is explicitly characterized, as well as the value of biological diversity, in terms of the welfare gain of biodiversity conservation. The Epstein-Zin-Weil specification of the utility function allows us to disentangle the effects of risk aversion and aversion to fluctuations. A two-player game extension of the model highlights the effect of volatility externalities and the Paretian sub-optimality of the decentralized choice.
    Keywords: collective decibiodiversity, stochastic endogenous growth, insurance value, recursive preferences
    JEL: Q56 Q58 Q10 Q15 O13 O20 C73
    Date: 2017–03
  3. By: Johannes C. Buggle
    Abstract: This paper explores the historical origins of collectivist cultural norms and their longterm economic consequences. In its first part, I test the hypothesis that collectivism emerged historically in pre-industrial agricultural economies in which group effort was crucial for subsistence. I find a positive and significant association between the traditional use of irrigation - a production mode that required extensive collaboration and coordination within groups of farmers - and collectivist norms today. Instrumenting traditional irrigation by the environmental suitability for irrigated agriculture lead to similar results that point at a causal interpretation of the findings. I find that the effects persist in migrants, and investigate factors that hinder the transmission of collectivism. The second part of the paper shows that by affecting culture, past irrigated agriculture continues to influence contemporaneous innovation at the national and individual level. While irrigated agriculture is associated with greater technological progress in pre-modern societies, this relationship is reversed in the long-run. In addition, by favoring attitudes towards obedience, past irrigation also predicts patterns of job specialization and selection into routine-intensive jobs of countries and individuals.
    Keywords: Agriculture; Culture, Collectivism, Persistence, Innovation, Job Tasks
    JEL: N00 O10 O30 Z10
    Date: 2017–04
  4. By: MERTER MERT (Gazi University)
    Abstract: This study simply claims that technological progress has positive and negative effects on the labour productivity, so, on the economic growth. Technological progress may have a negative effect on economic growth because of skills obsolescence of labour. For this reason, if the nature of technological progress is assumed as Harrod-neutral for the steady-state analysis, then, the net effect of the technological progress on the economic growth can be examined. Using Hicks-neutrality, it cannot be possible to investigate positive and negative effects. The present study offers a simple calculation procedure in order to disentangle the positive and negative effects. Finally, the study tries to introduce capital-deepening-induced technological progress, if the growth rate and contribution of technological progress is found negative while there is positive economic growth and the steady state conditions are hold at the final state.
    Keywords: Economic growth, technological progress, skills obsolescence.
    JEL: O40 O39
  5. By: Erwan MOUSSAULT (Université de Cergy-Pontoise, THEMA)
    Abstract: This paper studies the impact of the tax system on intergenerational family transfers in an overlapping generation model of a closed economy, with endogenous human capital growth. We limit ourselves to simple tax structures with labor and inheritance taxes. When public debt is an available instrument for the government, we show that the fiscal policy used to achieve the long run optimal endogenous growth improves the individuals' consumption of the first generations. In this case, the government reduces the tax burden on labor, encourages human capital development and puts in place a redistributive policy. If the public debt is not available, the government does not pursue a redistributive policy, both tax rates implemented are higher and the long run human capital growth is greater as well. In all cases, the optimal inheritance tax rate is higher than the optimal tax rate on labor income.
    Keywords: family transfers, debt, altruism, growth, optimal taxation.
    JEL: D64 H21 H23 H63 I31
    Date: 2017
  6. By: Kosuke Aoki (University of Tokyo); Naoko Hara (Bank of Japan); Maiko Koga (Bank of Japan)
    Abstract: This paper constructs a growth model of the distance from the world technology frontier to argue that firms' incentives to innovate and the government's decision on implementing reforms can be mutually reinforcing. This complementarity may, however, result in a country falling into a self-perpetuating low productivity trap. Certain types of structural change, initiated either by the private sector or by the government, can help the country to escape from this trap.
    Keywords: Economic Growth; Economic Reform; Productivity Gap
    JEL: O11 O43
    Date: 2017–04–13

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