nep-gro New Economics Papers
on Economic Growth
Issue of 2017‒06‒25
ten papers chosen by
Marc Klemp
Brown University

  1. Roots of Autocracy By Galor, Oded; Klemp, Marc
  2. Minorities, Human Capital and Long-Run Development: Persistence of Armenian and Greek Influence in Turkey By Eren Arbatli; Leonardo Gokmen Gunes
  3. High School Genetic Diversity and Later-life Student Outcomes: Micro-level Evidence from the Wisconsin Longitudinal Study By C. Justin Cook; Jason M. Fletcher
  4. Disease and Fertility: Evidence from the 1918 Influenza Pandemic in Sweden By Boberg-Fazlic, Nina; Ivets, Maryna; Karlsson, Martin; Nilsson, Therese
  5. Artificial nighttime lights and the “real” well-being of nations: ‘Measuring economic growth from outer space’ and welfare from right here on Earth By Amavilah, Voxi Heinrich
  6. Oil, Volatility and Institutions: Cross-Country Evidence From Major Oil Producers By Kamiar Mohaddes; Amany El-Anshasy; Jeffrey B. Nugent
  7. Is there poverty convergence? By Jesús Crespo Cuaresma; Stephan Klasen; Konstantin M. Wacker
  9. Export product range and economic performance – An emphasis on small advanced EU countries By Kaitila, Ville
  10. Unemployment and Income-Distribution Effects of Economic Growth: A Minimum-Wage Analysis with Optimal Saving By Richard A. Brecher; Till Gross

  1. By: Galor, Oded (Brown University); Klemp, Marc (Brown University)
    Abstract: Exploiting a novel geo-referenced data set of population diversity across ethnic groups, this research advances the hypothesis and empirically establishes that variation in population diversity across human societies, as determined in the course of the exodus of humans from Africa tens of thousands of years ago, contributed to the differential formation of pre-colonial autocratic institutions within ethnic groups and the emergence of autocratic institutions across countries. Diversity has amplified the importance of institutions in mitigating the adverse effects of non-cohesiveness on productivity, while contributing to the scope for domination, leading to the formation of institutions of the autocratic type.
    Keywords: autocracy, economic growth, diversity, institutions, Out-of-Africa Hypothesis of Comparative Development
    JEL: O1 O43 Z10
    Date: 2017–06
  2. By: Eren Arbatli (Faculty of Economic Sciences, NRU); Leonardo Gokmen Gunes (New Economic School, Moscow)
    Abstract: We study the long-term economic legacy of highly-skilled minorities a century after their wholesale expulsion. Using mass expulsions of Armenian and Greek communities of the Ottoman Empire in the early 20th century as a unique natural experiment of history, we show that districts with greater presence of Armenian and Greek minorities at the end of the 19th century are systematically more densely populated, more urbanized, and more developed today. Results are robust to accounting for an extensive set of geographical and historical factors of development and minority settlement patterns. Matching type estimators, instrumental variable regressions, and a sub-province level case study corroborate our findings. Importantly, we provide evidence on the channels of persistence. Armenian and Greek contribution to long-run development is largely mediated by their legacy on local human capital accumulation. In comparison, the mediating effect of minority asset transfer on development appears less important.
    Keywords: human capital, economic development, expulsion, minorities, ethnicity, Armenians, Greeks, persistence. JEL Classification: O100, O430, P480, N400, Z120.
  3. By: C. Justin Cook; Jason M. Fletcher
    Abstract: A novel hypothesis posits that levels of genetic diversity in a population may partially explain variation in the development and success of countries. Our paper extends evidence on this novel question by subjecting the hypothesis to an alternative context that eliminates many alternative hypotheses by aggregating representative data to the high school level from a single state (Wisconsin) in 1957, when the population was composed nearly entirely of individuals of European ancestry. Using this sample of high school aggregations, we too find a strong effect of genetic diversity on socioeconomic outcomes. Additionally, we check an existing mechanism and propose a new potential mechanism of the results for innovation: personality traits associated with creativity and divergent thinking.
    JEL: J24 O4
    Date: 2017–06
  4. By: Boberg-Fazlic, Nina (University of Southern Denmark); Ivets, Maryna (University of Duisburg-Essen); Karlsson, Martin (University of Duisburg-Essen); Nilsson, Therese (Lund University)
    Abstract: This paper studies the effect of the 1918–19 influenza pandemic on fertility using a historical dataset from Sweden. Our results suggest an immediate reduction in fertility driven by morbidity, and additional behavioral effects driven by mortality. We find some evidence of community rebuilding and replacement fertility, but the net long-term effect is fertility reduction. In districts highly affected by the flu there is also an improvement in parental quality: we observe a relative increase in births to married women and better-off city dwellers. Our findings help understand the link between mortality and fertility, one of the central relations in demography, and show that several factors – including disruptions to marriage and labor markets – contribute to fertility reduction in the long term. Our results are consistent with studies that find a positive fertility response following natural disasters, but with high-quality historical data we show that this effect is short-lived.
    Keywords: 1918–19 influenza pandemic, influenza and pneumonia mortality, fertility, difference-in-differences
    JEL: I12 J11 J13
    Date: 2017–06
  5. By: Amavilah, Voxi Heinrich
    Abstract: GDP remains too much of an imprecise measure of the standard of living. There is a need for either substitutes or complements. Nighttime lights are a reasonable indicator of the extent, scale, and intensity of socio-economic activities, but a poor measure of national welfare. However, if nighttime lights are understood to constitute externalities, then their effects can be used to adjust measured growth for welfare. Nighttime lights appear to exert sub-optimal positive externalities in developing countries, and supra-optimal negative externality in developed countries. This means that even if we assume equal growth rates in developing and developed countries, welfare is enhanced by increased nighttime lights in developing countries and reduced by increasing nighttime lights in developed countries.
    Keywords: Artificial lights and economic growth; nighttime lights and growth; growth and welfare; nighttime lights and real well-being (welfare)
    JEL: D62 H23 I3 I31 O15 O47 Q52 R13
    Date: 2017–06–16
  6. By: Kamiar Mohaddes (University of Cambridge); Amany El-Anshasy; Jeffrey B. Nugent
    Abstract: This paper examines the long-run effects of oil revenue and its volatility on economic growth as well as the role of institutions in this relationship. We collect annual and monthly data on a sample of 17 major oil producers over the period 1961—2013, and use the standard panel autoregressive distributed lag (ARDL) approach as well as its cross-sectionally augmented version (CS-ARDL) for estimation. Therefore, in contrast to the earlier literature on the resource curse, we take into account all three key features of the panel: dynamics, heterogeneity and cross-sectional dependence. Our results suggest that (i) there is a significant negative effect of oil revenue volatility on output growth, (ii) higher growth rate of oil revenue significantly raises economic growth, and (iii) better fiscal policy (institutions) can offset some of the negative effects of oil revenue volatility. We therefore argue that volatility in oil revenues combined with poor governmental responses to this volatility drives the resource curse paradox, not the abundance of oil revenues as such.
    Date: 2017–06–29
  7. By: Jesús Crespo Cuaresma (Vienna University of Economics and Business); Stephan Klasen (University of Göttingen); Konstantin M. Wacker (Johannes Gutenberg-University Mainz, Germany)
    Abstract: Martin Ravallion ("Why Don't We See Poverty Convergence?" American Economic Review, 102(1): 504-23; 2012) presents evidence against the existence of proportionate convergence in global poverty rates despite convergence in household mean income levels and the link between income growth and poverty reduction. We show that heterogeneity in this link affects the evidence of poverty convergence and that this result depends on the sample selected, especially on the inclusion of transition economies with poorly measured low poverty incidences. Motivating the poverty convergence equation with an arguably superior semi-elasticity specification, we find robust evidence of convergence in absolute poverty rates.
    Keywords: poverty convergence, income inequality, economic growth, poverty trap, transition economies
    JEL: I32 D31 P36
  8. By: Dutta, Dilip; Fearnley, Nicholas
    Abstract: Two factors that have become dominant in the search for the non-economic drivers of economic growth and development are culture and informal institutions. This paper uses Rokeach (1976) to unite both factors under the one conceptual framework of informal institutions. Cultural factors such as Limited Good Syndrome, Achievement Motivation and Generalized Trust from Marini’s study are interpreted as informal institutions. These informal institutions form the core of our panel data analysis investigating the extent to which they contribute to economic growth. The results show no single pattern in their contribution.
    Keywords: Informal institutions, economic growth, economic culture, limited good syndrome, achievement motivation, and generalized trust
    Date: 2016–06
  9. By: Kaitila, Ville
    Abstract: We analyse the number of different HS8 products in the EU countries’ ex-ports in 1995–2015. We review what share, or coverage, of the total possible number of these products the countries exported each year. We analyse whether the development in this coverage rate as opposed to concentration of exports as measured by the Her-findahl-Hirschman index is associated with GDP per capita growth. We find that chang-es in the coverage rate relate positively, but that the development of the HH index has no statistically significant relation to economic growth.
    Keywords: Exports, export products, GDP growth, EU
    JEL: F14 F43 O47
    Date: 2017–06–21
  10. By: Richard A. Brecher (Department of Economics, Carleton University); Till Gross (Department of Economics, Carleton University)
    Abstract: Theoretically and numerically, we analyze the unemployment and income-distribution effects of economic growth, in a model with optimal saving (investment) and a minimum wage for unskilled labor. Within this three-factor model (including skilled labor), an exogenous rise in the growth rate increases unemployment if capital and unskilled labor are complements (versus substitutes), implying a trade-off between (faster) growth and (lower) unemployment. We also show how the growth rate affects the skill premium and factor shares of national income, providing little support for Piketty’s (2014) controversial thesis that capital’s share is higher when growth is slower.
    Keywords: Optimal growth, Minimum wage, Unskilled unemployment, Income distribution
    JEL: E24 O41
    Date: 2017–06–12

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