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on Economic Growth |
| By: | Ager, Philipp (Department of Business and Economics); Hansen, Casper Worm (Department of Economics) |
| Abstract: | The introduction of immigration quotas in the 1920s fundamentally changed U.S. immigration policy. We exploit this policy change to estimate the economic consequences of immigration restrictions for the U.S. economy. The implementation of the quota system led to a long-lasting relative decline in population growth in areas with larger pre-existing immigrant communities of affected nationalities. This effect was largely driven by the policy-restricted supply of immigrants from quota-affected nationalities and lower fertility of first- and second-generation immigrant women. In the more affected areas labor productivity growth in manufacturing declined substantially and native workers were pushed into lower-wage occupations. While native white workers faced sizable earnings losses, black workers benefited from the quota system and improved their relative economic status within the more affected areas. |
| Keywords: | Immigration restrictions; productivity growth; local labor markets; racial wage gap |
| JEL: | J31 J61 N31 O15 |
| Date: | 2017–10–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sdueko:2017_011&r=gro |
| By: | Markus Eberhardt; Francis Teal |
| Abstract: | The empirical growth literature is dominated by accounting and regression methods which assume common production technology across countries. Our empirical model relaxes this assumption and further allows unobservable determinants of output (Total Factor Productivity, TFP) to differ across countries and time, while accounting for endogeneity and cross-section correlation arising from global shocks. Using manufacturing sector data for 48 economies we show that the assumption of common technology creates questionable results in accounting exercises and is rejected in our regressions. We illustrate that the erroneous choice of homogeneous technology has substantial impact on patterns and magnitudes of resulting TFP estimates. |
| Keywords: | Cross-Country Analysis; Heterogeneous Technology; Total Factor Productivity; Common Factor Model |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:17/16&r=gro |
| By: | Jakob B Madsen |
| Abstract: | In his 2014 book, Thomas Piketty argues that wealth inequality is sharply increasing in r-g and refers to r>g as ‘the central contradiction of capitalist economics’, where r is asset returns and g is real income growth. To assess whether inequality is increasing in the (r-g)-gap this paper: 1) constructs unique annual data on asset returns for a balanced portfolio and several other variables for Britain over the period 1210-2013, and 2) examines whether the dynamics in the wealth-income ratio, W-Y, and capital’s income share, SW, are governed by (r-g). It is shown that r and g are robust and significant determinants of wealth and income inequality and that they have been the major forces behind the large inequality waves over the past eight centuries. |
| Keywords: | Inequality and the (r-g)-gap; dynamics of inequality; inequality in Britain, 1210-2013 |
| JEL: | E1 E2 O4 N1 N30 P1 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2017-63&r=gro |
| By: | Michel Serafinelli; Guido Tabellini |
| Abstract: | Creativity is often highly concentrated in time and space, and across different domains. What explains the formation and decay of clusters of creativity? In this paper we match data on thousands of notable individuals born in Europe between the XIth and the XIXth century with historical data on city institutions and population. After documenting several stylized facts, we show that the formation of creative clusters is not preceded by increases in city size. Instead, the emergence of city institutions protecting economic and political freedoms facilitates the attraction and production of creative talent. Keywords: innovation, agglomeration, political institutions, immigration, gravity. JEL: R10, O10, J61, N13 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:608&r=gro |
| By: | Mamoon, Dawood |
| Abstract: | The paper reviews recent literature that tries to find the relationship of trade with economic growth, poverty and inequality. The analysis suggests that trade may be good for the poor but if it leads to inequality especially in industrial wages, it may be detrimental to sustainable economic development. A valid strategy to make trade good for growth and the poor is to invest in education at all levels. A gender sensitive education policy may go a long way in sowing the seeds of better economic management. |
| Keywords: | Trade, Poverty, Inequality |
| JEL: | F15 |
| Date: | 2017–10–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:82069&r=gro |
| By: | Maik T. Schneider; Ralph Winkler |
| Abstract: | We study the role of endogenous healthcare choices by households to extend their expected lifetimes on economic growth and welfare in a decentralized overlapping generations economy with the realistic feature that households’ savings are held in annuities. We characterize healthcare spending in the decentralized market equilibrium and its effects on economic growth. We identify the moral-hazard effect in healthcare investments when annuity rates are conditioned on average mortality and explain the conditions under which this leads to over-investment in healthcare. Moreover, we specify the general equilibrium effects and macroeconomic repercussions associated with this moral-hazard effect. In a numerical simulation of our model with OECD data, we find that the moral-hazard effect may be substantial and implies sizeable welfare losses of approximately 1.5%. At a more general level, our study suggests that welfare improvements from longevity increases may be lower than suggested when considered in planner economies. |
| Keywords: | annuities, economic growth, endogenous longevity, healthcare expenditures, healthcare technology, moral hazard, pension systems, welfare analysis |
| JEL: | O40 I10 J10 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6367&r=gro |
| By: | Christian Leßmann; Arne Steinkraus |
| Abstract: | We study whether the spatial distribution of natural resources across different ethnic groups within countries impede spatial inequality, national economic performance, and the incidence of armed conflict. By providing a theoretical rent-seeking model and analysing a set of geocoded data for mines, night-time light emissions, local populations and ethnic homelands, we show that the distribution of resources is a major driving factor of ethnic income inequality and, thus, induces rent-seeking behaviour. Consequently, we extend the perspective of the resource curse to explain cross-country differences in economic performance and the onset of civil conflicts. We show that the inequality in the spatial distribution of resource endowments within countries drives the curse of natural resources, not the resources per se. |
| Keywords: | natural resources, minerals, mines, night lights, luminosity, ethnic income inequality, spatial inequality, development, civil war, conflict |
| JEL: | D72 D74 Q32 Q34 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6299&r=gro |
| By: | Van Noort, S. |
| Abstract: | Private property rights security is currently seen as central to explaining cross-country differences in economic development. Variation in private property rights security itself is perceived to be best explained by differences in the degree to which the political system is able to constrain the despotic power of state executives. I reassess the existing evidence for these two hypotheses and find that: (1) higher levels and significant changes in private property rights security and constraints on the executive are not correlated with higher levels of income and (changes in) growth rates; (2) the commonly used instrument for constraints on the executive and private property rights security - the natural log of European settler mortality - is invalid because it is associated with current levels of income besides its effect through private property rights security and constraints on the executive; and (3) the regularly cited Korean case is in fact evidence against these hypotheses. I provide explanations for these findings and call for a rethinking of which type of institutions and policies are decisive for growth. |
| Keywords: | Institutions, Private Property Rights Security, Economic Development, Con- straints on the Executive |
| JEL: | O11 P16 P51 |
| Date: | 2017–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1746&r=gro |
| By: | Kirill Chmel (National Research University Higher School of Economics); Alexander Demin (National Research University Higher School of Economics); Kirill Kazantcev (National Research University Higher School of Economics) |
| Abstract: | Economic sanctions, like the most of political events involving numerous states, are almost always explicitly aimed to alter internal policies and affect domestic issues. Sanctions are not a discrete event, rather they are a long lasting insidious process. It is significant to consider not only the state of the country under sanctions or without them, but also the effect of the time under sanctions. Hence, the research question is as follows: How does cumulative effect of sanctions influence the dictators behavior in terms of repressions and co-optation? In order to find a feasible answer to that question, first, we build a theoretical model and draw empirical implications from it. The main argument that we develop in the paper is as follows. The overall effect of sanction is robustly important for the dictator, fostering repressions and co-optation (separately treated) as the ways of buttressing the regime legitimacy. Moreover, cumulative effect of sanctions (i.e. the influence of all the previous periods under sanctions) increases the levels of repressions with decreasing marginal effects. |
| Keywords: | authoritarian regimes, dictators strategies, sanctions, repressions, co-optation, game theory |
| JEL: | F51 P26 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:50/ps/2017&r=gro |