nep-gro New Economics Papers
on Economic Growth
Issue of 2017‒08‒20
four papers chosen by
Marc Klemp
Brown University

  1. Directed Technological Change & Cross Country Income Differences: A Quantitative Analysis By Jerzmanowski, Michal; Tamura, Robert
  2. Fertile Ground for Conflict By Berman, Nicolas; Couttenier, Mathieu; Soubeyran, Raphael
  3. Dynamic heterogeneous R&D with cross-technologies interactions By Anton Bondarev; Frank C. Krysiak
  4. Why is South Africa Still a Developing Country? By Bakari, Sayef

  1. By: Jerzmanowski, Michal; Tamura, Robert
    Abstract: Research aimed at understanding cross-country income differences finds that inputs of human and physical capital play a limited role in explaining those differences. However, most of this work assumes workers with different education levels are perfect substitutes. Does moving away from this assumption affect our conclusions about the causes of long run development? To answer this question we construct measures of skill-specific productivity and barriers to innovation for a large sample of countries over the period 1910-2010. We use a model of endogenous directed technological change together with a new data set on output and labor force composition across countries. We find that rich countries use labor of all skill categories more efficiently, however, in the absence or barriers to entry, poor countries would actually be more efficient at using low-skill labor. Our estimates imply that after 1950 the world technology frontier expanded much faster for college-educated workers than for those with lower skill sets. This technology diffused to many countries, allowing even poorer countries to experience relatively robust growth of high-skill-specific productivity. Their GDP growth failed to reflect that because of their labor composition; they have very few workers in the higher skilled category. Finally, we investigate the relative importance of factor endowments versus barriers to technology in explaining the current disparities of standards of living and find it to depend crucially on the value of the elasticity of substitution between skill-types. Under a lower value of 1.6, our model yields barrier estimates that are lower and relatively less important in explaining cross-country income differences: in this scenario physical and human capital account almost 70% of variance in 2010 GDP per worker in our sample. Using elasticity of 2.6, we find barriers that are higher and explain most of the variation in output. We provide some evidence that the higher value of elasticity is preferred.
    Keywords: endogenous directed technology, heterogeneous labor, cross country income differences
    JEL: E1 J0 O1
    Date: 2017–08–01
  2. By: Berman, Nicolas; Couttenier, Mathieu; Soubeyran, Raphael
    Abstract: We investigate how variations in soil fertility affect civil conflicts. We first present a model with heterogeneous land in which variations in input prices (fertilizers) affect appropriable rents and the opportunity costs of fighting. The theory predicts that spikes in input prices increase the likelihood of conflicts through their effect on income and inequality, and that this effect is magnified when soil fertility is naturally more heterogenous. We test these predictions using data on conflict events covering all Sub-Saharan African countries at a spatial resolution of 0.5 x 0.5 degree latitude and longitude over the 1997-2013 period. We combine information on soil characteristics and worldwide variations in fertilizer prices to identify local exogenous changes in input costs. As predicted, variations in soil productivity triggered by variations in fertilizer prices are positively associated with conflicts, especially in cells where land endowments are more heterogeneous. In addition, we find that the distribution of land fertility both within and across ethnic groups affects violence, and that the effect of between-group heterogeneity in soil quality is magnified in densely populated areas. Overall, our findings imply that inequality in access to fertile areas -- an issue largely neglected in the literature dealing with the roots of Sub-Saharan African civil wars -- constitutes a serious threat to peace at the local-level.
    Keywords: conflict; Fertility; inequality; Land
    JEL: C23 D74 Q34
    Date: 2017–08
  3. By: Anton Bondarev; Frank C. Krysiak (University of Basel)
    Abstract: In many countries, inducing large-scale technological changes has become an important policy objective, as in the context of climate policy or energy transitions. Such large-scale changes require the development of strongly interlinked technologies. But current economic models have little flexibility for describing such linkages. We present a model of induced technological change that covers a fairly large set of cross-technology interactions and that can describe a wide variety of long-run developments. Using this model, we analyse and compare the development induced by optimal fi rm behaviour and the socially optimal dynamics. We show that the structure of cross-technology interactions is highly important. It shapes the dynamics of technological change in the decentralised and the socially optimal solution, including the prospects of continued productivity growth. It determines whether the decentralised and the socially optimal solution have similar or qualitatively di fferent dynamics. Finally, it is highly important for the question whether simple r&d policies can induce efficient technological change.
    Keywords: technological spillovers; social optimality; market inefficiency; optimal control; heterogeneous innovations
    JEL: O33 C02 C61 D62
    Date: 2017
  4. By: Bakari, Sayef
    Abstract: Despite the abundance of goods and natural resources that characterize South Africa, and despite the remarkable progress in the field of industry and manufacturing, it is still in the list of developing countries. The aim of this article is to re-examine the causes of this node by studying the basic pillars for the creation of solid economic growth as is the case for all developing countries by looking at the impact of domestic investment, exports and imports on South Africa's economic growth in the short and long term. Our empirical analyses show that imports present the main barrier of prosperity and progress in South Africa.
    Keywords: Domestic Investment, Exports, Imports, Economic growth, South Africa.
    JEL: E22 F11 F14 O47
    Date: 2017–08

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