nep-gro New Economics Papers
on Economic Growth
Issue of 2017‒09‒10
eight papers chosen by
Marc Klemp
Brown University

  1. Inequality, Crime, and the Long Run Legacy of Slavery By Buonnano, Paolo; Vargas, Juan F.
  2. Hyperbolic discounting and the time-consistent solution of three canonical environmental problems By Strulik, Holger
  3. Optimal Population Growth as an Endogenous Discounting Problem: The Ramsey Case By Raouf Boucekkine; Blanca Martínez; José Ramón Ruiz-Tamarit
  4. A Reappraisal of the Resource Curse By Nicolas Clootens; Djamel Kirat
  5. A Long-Run Perspective on the Spatial Concentration of Manufacturing Industries in the United States By Crafts, Nicholas; Klein, Alex
  6. An analysis of the contribution of public expenditure to economic growth and fiscal multipliers in Mexico, Central America and the Dominican Republic, 1990-2015 By Garry, Stefanie; Rivas Valdivia, Juan Carlos
  7. The Biofuel-Development Nexus: A Meta-Analysis By Johanna Choumert; Pascale Combes Motel; Charlain Guegang
  8. The Role of Structural Transformation in Regional Convergence in Japan: 1874-2008 By Fukao, Kyoji; Paul, Saumik

  1. By: Buonnano, Paolo; Vargas, Juan F.
    Abstract: This paper investigates the relationship between economic inequality and crime in Colombian municipalities. Following recent scholarly research that suggests that the legacy of slavery is largely manifest in persistent levels of economic inequality, we instrument economic inequality with a census-based measure of the proportion of slaves in each municipality before the abolition of slavery in the 19 century. We also explore the robustness of our estimates to relaxing the exclusion restriction, as the slavery instrument is only plausibly exogenous. We document a strong association between inequality and both violent and property crime rates at the municipal level. Our estimates are robust to including traditional determinants of crime (like population density, the proportion of young males, the average education level, the quality of law enforcement institutions, and the overall economic activity), as well as current ethnic differences and geographic characteristics that may be correlated both with the slave economy and with crime.
    Keywords: Educación, Economía, Equidad e inclusión social, Investigación socioeconómica, Pobreza, Seguridad,
    Date: 2016
  2. By: Strulik, Holger
    Abstract: In this paper I propose a time-consistent method of discounting hyperbolically that contains the discount rate implied by Gamma discounting as a special case. I apply the discounting method to three canonical environmental problems: (i) optimal renewable resource use, (ii) the tragedy of the commons, (iii) economic growth and pollution. I then compare results with those for conventional exponential discounting using the normalization that both methods provide the same present value of an infinite constant flow. I show that, irrespective of potentially high initial discount rates, time-consistent hyperbolic discounting leads always to a steady state of maximum yield, or, if the environment enters the utility function, a steady state where the Green Golden Rule applies. While (asymptotic) extinction is a real threat under exponential discounting it is impossible under time-consistent hyperbolic discounting. This result is also confirmed for open access resources. In a model of economic growth and pollution, hyperbolic discounting establishes the Golden Rule of capital accumulation and the Modified Green Golden Rule.
    Keywords: discounting,time-consistency,renewable resource use,property rights,growth,pollution
    JEL: D60 D90 Q20 Q50 Q58 O40
    Date: 2017
  3. By: Raouf Boucekkine (IMéRA - Institute for Advanced Studies - Aix-Marseille University, GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique - ECM - Ecole Centrale de Marseille); Blanca Martínez (Department of Economics, Universidad Complutense de Madrid, ICAE - Instituto Complutense de Analisis Economico); José Ramón Ruiz-Tamarit (Department of Economic Analysis, Universitat de Valencia - Universitat de València, IRES Department of Economics, Université Catholique de Louvain)
    Abstract: This paper revisits the optimal population size problem in a continuous time Ramsey setting with costly child rearing and both intergenerational and intertemporal altruism. The social welfare functions considered range from the Millian to the Benthamite. When population growth is endogenized, the associated optimal control problem involves an endogenous effective discount rate depending on past and current population growth rates, which makes preferences intertemporally dependent. We tackle this problem by using an appropriate maximum principle. Then we study the stationary solutions (balanced growth paths) and show the existence of two admissible solutions except in the Millian case. We prove that only one is optimal. Comparative statics and transitional dynamics are numerically derived in the general case.
    Keywords: optimal population size,population ethics,optimal growth,endogenous discounting,optimal demographic transitions
    Date: 2017–08
  4. By: Nicolas Clootens (LEO - Laboratoire d'économie d'Orleans - UO - Université d'Orléans - CNRS - Centre National de la Recherche Scientifique); Djamel Kirat (LEO - Laboratoire d'économie d'Orleans - UO - Université d'Orléans - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We here provide some evidence that the growth regression models used to test the resource curse should correctly account for heterogeneities between countries. We reproduce the results in a well-known article by Brunnschweiler and Bulte (2008) and then test their robustness. We show that the impact of resource dependence on growth strongly depends on the way in which we model heterogeneity. We find evidence of the resource curse in low-income countries.
    Keywords: Dutch-Disease
    Date: 2017
  5. By: Crafts, Nicholas; Klein, Alex
    Abstract: We construct spatially-weighted indices of the geographic concentration of U.S. manufacturing industries during the period 1880 to 1997 using data from the Census of Manufactures and the Bureau of Labor Statistics. Several important new results emerge from this exercise. First, we find that average spatial concentration was much lower in the late-20th- than the late-19th century and that this was the outcome of a continuing reduction over time. Second, the persistent tendency to greater spatial dispersion was characteristic of most manufacturing industries. Third, even so, economically and statistically significant spatial concentration was pervasive throughout this period.
    Keywords: manufacturing belt; spatial concentration; transport costs
    JEL: N62 N92 R12
    Date: 2017–08
  6. By: Garry, Stefanie; Rivas Valdivia, Juan Carlos
    Abstract: In this research, different complementary approaches are developed to determine the impact of public expenditure on economic growth in Mexico, Central America and the Dominican Republic. The evolution of the countries’ fiscal performance is analyzed; the strong link between public spending and economic growth is verified; the long-run relationship between current and capital expenditure with GDP growth is identified, and it is shown that public spending has a significant multiplier effect in the short and long-term, highlighting its persistence over time.
    Date: 2017–08
  7. By: Johanna Choumert (Economic Development Initiatives (EDI)); Pascale Combes Motel (CERDI); Charlain Guegang
    Abstract: Although the production of biofuels has expended in recent years, the literature on its impact on growth and development finds contradictory findings. This paper presents a meta-analysis of computable general equilibrium studies published between 2006 and 2014. Using 26 studies, we shed light on why results differ. We investigate factors such as the type of biofuels, the geographic area and the characteristics of models. Our results indicate that the outcomes of CGE simulations are sensitive to models parameters. They also suggest a divide between developed / emerging countries versus Sub-Saharan African countries.
    Keywords: Biofuel, Computable General Equilibrium Model, Development, Bioethanol, Biodiesel
    JEL: Q16 O13 C68
    Date: 2017–02
  8. By: Fukao, Kyoji; Paul, Saumik
    Abstract: Extending the literature on productivity convergence to a multi-sector growth framework, we show that σ-convergence in regional productivity growth can be decomposed into σ-convergence in sectoral productivity growth and σ - convergence in structural transformation-led productivity growth. Empirical support is provided using novel historical datasets at the Japanese prefecture level from 1874 to 2008. In pre-war Japan (1874–1940), regional convergence was primarily driven by productivity growth in the secondary sector. The rapid productivity convergence within the secondary and tertiary sectors relative to that in the primary sector between 1890 and 1940 provided an important base for the large convergence effects of structural transformation in the post-war years through a larger sectoral productivity gap in the lagging regions compared to the leading regions. However, the pace of regional convergence gradually slowed down and since the early 1970s the σ -convergence of structural transformation has been offset by the σ-divergence of within-sector productivity growth and vice versa, thwarting the pace of convergence in aggregate productivity.
    Keywords: Structural transformation, Labor productivity, Regional convergence, Japan
    JEL: O40 O10
    Date: 2017–09

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