nep-gro New Economics Papers
on Economic Growth
Issue of 2018‒03‒26
fourteen papers chosen by
Marc Klemp
University of Copenhagen

  1. Roman Roads to Prosperity: Persistence and Non-Persistence of Public Goods Provision By Dalgaard, Carl-Johan; Kaarsen, Nicolai; Olsson, Ola; Selaya, Pablo
  2. Kinship Systems, Cooperation, and the Evolution of Culture By Benjamin Enke
  3. Childless Aristocrats. Inheritance and the extensive margin of fertility By Gobbi, Paula; Goñi, Marc
  4. Sample selection biases and the historical growth pattern of children By Schneider, Eric B.
  5. Regional Economic Development in Europe, 1900-2010: a description of the Patterns By Rosés, Joan R.; Wolf, Nikolaus
  6. Asymmetric Effects of Inequality on Per Capita Real GDP of the United States By Adnen Ben Nasr; Mehmet Balcilar; Rangan Gupta; Seyi Saint Akadiri
  7. Demand-Led Growth Theory in a Classical Framework: Its Superiority, Its Limitations, and Its Explanatory Power By Smith, Matthew
  8. Human Capital, Knowledge Creation, Knowledge Diffusion, Institutions and Economic Incentives: South Korea versus Africa By Simplice Asongu; Vanessa Tchamyou
  9. Higher Education Subsidy Policy and R&D-based Growth By Takaaki Morimoto; Ken Tabata
  10. Dimensional Analysis in Economics: A Study of the Neoclassical Economic Growth Model By Miguel Alvarez Texocotitla; M. David Alvarez Hernandez; Shani Alvarez Hernandez
  11. Learning outside the factory: the impact of technological change on the rise of adult education in nineteenth-century France. By Claude Diebolt; Charlotte Le Chapelain; Audrey Rose Menard
  12. Three pillars of urbanization: Migration, aging, and growth By Grafeneder-Weissteiner, Theresa; Prettner, Klaus; Südekum, Jens
  13. Asymmetric Cointegration and Causality between Natural Gas Consumption and Economic Growth in Nigeria By Danladi Galadima, Mukhtar; Wambai Aminu, Abubakar
  14. Inflation, Inflation Uncertainty, and Growth: Evidence from Ghana By Njindan Iyke, Bernard; Ho, Sin-Yu

  1. By: Dalgaard, Carl-Johan; Kaarsen, Nicolai; Olsson, Ola; Selaya, Pablo
    Abstract: How persistent is public goods provision in a comparative perspective? We explore the link between infrastructure investments made during antiquity and the presence of infrastructure today, as well as the link between early infrastructure and economic activity both in the past and in the present, across the entire area under dominion of the Roman Empire at the zenith of its geographical extension. We find a remarkable pattern of persistence showing that greater Roman road density goes along with (a) greater modern road density, (b) greater settlement formation in 500 CE, and (c) greater economic activity in 2010. Interestingly, however, the degree of persistence in road density and the link between early road density and contemporary economic development is weakened to the point of insignificance in areas where the use of wheeled vehicles was abandoned from the first millennium CE until the late modern period. Taken at face value, our results suggest that infrastructure may be one important channel through which persistence in comparative development comes about.
    Keywords: infrastructure; Persistence; Public Goods; Roman Empire; Roman roads
    JEL: H41 O40
    Date: 2018–02
  2. By: Benjamin Enke
    Abstract: An influential body of psychological and anthropological theories holds that societies exhibit heterogeneous cooperation systems that differ both in their level of in-group favoritism and in the tools that they employ to enforce cooperative behavior. According to some of these theories, entire bundles of functional psychological adaptations – religious beliefs, moral values, negative reciprocity, emotions, and social norms – serve as “psychological police officer” in different cooperation regimes. This paper uses an anthropological measure of the tightness of historical kinship systems to study the structure of cooperation patterns and enforcement devices across historical ethnicities, contemporary countries, ethnicities within countries, and among migrants. The results document that societies with loose ancestral kinship ties cooperate and trust broadly, which appears to be enforced through a belief in moralizing gods, individualizing moral values, internalized guilt, altruistic punishment, and large-scale institutions. Societies with a historically tightly knit kinship structure, on the other hand, cheat on and distrust the out-group but readily support in-group members in need. This cooperation regime in turn is enforced by communal moral values, emotions of external shame, revenge-taking, and local governance structures including strong social norms. These patterns suggest that various seemingly unrelated aspects of culture are all functional and ultimately serve the same purpose of regulating economic behavior.
    Keywords: Kinship, culture, cooperation, enforcement devices
    JEL: D00 O10
    Date: 2018
  3. By: Gobbi, Paula; Goñi, Marc
    Abstract: We provide new evidence on the two-way link between fertility decisions on the extensive margin and inheritance. We focus on settlements, a popular inheritance scheme among British aristocrats that combined primogeniture and a one-generation entail of the family estates. Using peerage records (1650-1882), we find that settlements affected the extensive margin of fertility: they reduced childlessness rates by 14.7 pp., ensuring the survival of aristocratic dynasties. Since settlements were signed only if the family head survived until his heir's wedding, we establish causality by exploiting variation in the heirs birth order. Next, we show that the extensive margin of fertility can shape inheritance rules. We build a model with inter-generational hyperbolic discounting where inheritance rules affect fertility and, in turn, schemes restricting successors (e.g., settlements or trusts) emerge endogenously in response to concerns over the dynasty's survival. These results highlight the importance of fertility decisions for the analysis of inheritance.
    Keywords: Childlessness; Elites; Fertility; Inheritance; Inter-generational discounting.; Settlement
    JEL: J13 K36 N33
    Date: 2018–02
  4. By: Schneider, Eric B.
    Abstract: Bodenhorn et al. (2017) have recently sparked considerable controversy by arguing that the fall in adult stature observed in military samples in the United States and Britain during industrialisation was a figment of sample selection bias. While subsequent papers have questioned the extent of the bias (Komlos and A’Hearn 2016; Zimran 2017), there is renewed concern about selection bias in historical anthropometric datasets. This paper extends Bodenhorn et al.’s discussion of selection bias on unobservables to sources of children’s growth, specifically focussing on biases that could distort the age pattern of growth. Understanding how the growth pattern of children has changed is important since these changes underpinned the secular increase in adult stature and are related to child stunting observed in developing countries today. However, there is potential for selection on unobservables in historical datasets containing children’s and adolescents’ height, so scholars must be aware of these biases before analysing these sources. This paper highlights, among others, three common sources of bias: 1) positive selection of children into secondary school in the late nineteenth and early twentieth centuries; 2) distorted height by age profiles created by age thresholds for enlistment in the military; and 3) changing institutional ecology which determines to which institutions children are sent. Accounting for these biases weakens the evidence of a strong pubertal growth spurt in the nineteenth century and raises doubts on some long run analyses of changes in children’s growth, especially for Japan.
    Keywords: selection bias; child growth; anthropometrics; health history
    JEL: C52 C81 I00 J13 N3 O15
    Date: 2018–01
  5. By: Rosés, Joan R.; Wolf, Nikolaus
    Abstract: We provide the first long-run dataset of regional employment structures and regional GDP and GDP per capita in 1990 international dollars, stretching over more than 100 years. These data allow us to compare regions over time, among each other, and to other parts of the world. After some brief notes on methodology we describe the basic patterns in the data in terms of some key dimensions: variation in the density of population and economic activity, the spread of industry and services and the declining role of agriculture, and changes in the levels of GDP and GDP per capita. We next discuss patterns of convergence and divergence over time and their explanations in terms of short-run adjustment and long-run fundamentals. Also, we document for the first time a secular decrease in spatial coherence from 1900 to 2010. We find a U-shaped development in geographic concentration and regional income inequality, similar to the finding of a U-shaped pattern of personal income inequality.
    Keywords: Europe; Long-Run; Regional Inequality
    JEL: D31 N1 N9 R1
    Date: 2018–02
  6. By: Adnen Ben Nasr (Université de Tunis, ISGT, BESTMOD, Tunisia); Mehmet Balcilar (Eastern Mediterranean University, Northern Cyprus, Turkey; Montpellier Business School, Montpellier, France and University of Pretoria, Pretoria, South Africa); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa); Seyi Saint Akadiri (Eastern Mediterranean University, Northern Cyprus, Turkey)
    Abstract: Existing literature on the short-run and long-run impact of economic growth on income inequality have found that positive and negative output shock have worsened income distribution in the United States. In this paper, we attempt to empirically examine the opposite, that is, the impact of positive and negative income inequality shocks on the real output level. Using the same time-series data, over a period 1917-2012, in a more comprehensive manner by employing six measures of income distribution, we examine the impact of an increase or decrease income inequality on economic growth, using the nonlinear Autoregressive Distributed Lag (NARDL) approach. Our empirical results show that the positive and negative income inequality shocks have asymmetric effects in the long-run. We found through the significant long-run asymmetric behaviors of our models that, income inequality shock - whether positive or negative have a positive long-run effect on real output level in the US.
    Keywords: Income distribution, economic growth, asymmetry, time-series data, United States
    JEL: O16 C22
    Date: 2018–03
  7. By: Smith, Matthew (University of Sydney)
    Abstract: The main purpose of this paper is to show that the Keynesian-Kaleckian demand-led theory of growth proposed within the classical framework of prices and distribution as articulated by Sraffa (1960), is superior to the neoclassical supply-driven theory in explaining economic growth. After showing the fundamental theoretical problem with the neoclassical supply-driven approach to growth, we expound a demand-led model of growth that abandons ‘steady-state’ and, instead, adopts an ‘historical approach’ in which the data is specified for historical periods of time. The model incorporates the contribution of technical progress to demand-led growth and, thereby, provides the basis to identify the most important political, social, and institutional developments that historically explain growth and economic development since the advent of capitalism. Our historical analysis shows how demand-led growth theory can provide the foundation for a new and more coherent interpretation of the history of economic development.
    Keywords: Growth; J.M. Keynes; Classical Economics; Economic History; Development
    JEL: B51 N00 O40
    Date: 2018–03
  8. By: Simplice Asongu (Yaoundé/Cameroun); Vanessa Tchamyou (Yaoundé/Cameroun)
    Abstract: This article compares African countries to South Korea in terms of knowledge economy (KE). Emphasis is laid on human capital, knowledge creation, knowledge diffusion, institutions and economic incentives. The analytical approach consists of providing knowledge economy catch-up strategies that can be understood within the context of country-specific gaps between the frontier country in KE and laggard African countries. The empirical evidence is based on sigma convergence with data for the period 1996-2010. Overall, a KE diagnosis is provided by assessing KE gaps (between South Korea and specific-African countries) and suggesting compelling catch-up strategies with which to reduce identified gaps. Contemporary and non-contemporary policies from South Korea and more contemporary policies based on challenges of globalisation are discussed. The policy relevance of this inquiry aligns with the scholarly perspective that catch-up between South Korea and more advanced economies was accelerated by the former adapting to and assimilating relatively obsolete technological know-how from more developed nations.
    Keywords: Knowledge economy; Benchmarks; Policy syndromes; Catch-up; Africa
    JEL: O10 O30 O38 O55 O57
    Date: 2018–01
  9. By: Takaaki Morimoto (Graduate School of Economics, Osaka University); Ken Tabata (School of Economics, Kwansei Gakuin University)
    Abstract: Employing a two-period overlapping generations model of R&D-based growth with both product development and process innovation, this paper examines how a subsidy policy for encouraging more individuals to receive higher education affects the per capita GDP growth rate of the economy. We show that when the market structure adjusts partially in the short run, the effect of an education subsidy on economic growth is ambiguous and depends on the values of the parameters. However, when the market structure adjusts fully in the long run, the education subsidy expands the number of firms but reduces economic growth. These unfavorable predictions for the education subsidy on economic growth are partly consistent with empirical findings that mass higher education does not necessarily lead to higher economic growth. A higher education subsidy policy is perhaps inappropriate for the purpose of stimulating long-run economic growth.
    Keywords: Higher Education, Occupational Choice, R&D, Product Development, Process Innovation
    Date: 2018–02
  10. By: Miguel Alvarez Texocotitla; M. David Alvarez Hernandez; Shani Alvarez Hernandez
    Abstract: The fundamental purpose of the present research article is to introduce the basic principles of Dimensional Analysis in the context of the neoclassical economic theory, in order to apply such principles to the fundamental relations that underlay most models of economic growth. In particular, basic instruments from Dimensional Analysis are used to evaluate the analytical consistency of the Neoclassical economic growth model. The analysis shows that an adjustment to the model is required in such a way that the principle of dimensional homogeneity is satisfied.
    Date: 2018–02
  11. By: Claude Diebolt; Charlotte Le Chapelain; Audrey Rose Menard
    Abstract: The paper provides an empirical examination of the effect of the use of steam engine technology on the development of adult education in nineteenth-century France. In particular, we exploit exogenous regional variations in the distribution of steam engines across France to evidence that technological change significantly contributed to the development of lifelong training during the 1850-1881 period. Our research shows that steam technology adoption in France was not deskilling. We argue that this process raised the demand for new skills adapted to the development of French industries.
    Keywords: Adult Education, Cliometrics, France, Human Capital, Industrialization, Steam Engines, Technological Change.
    JEL: A12 C18 C80 I21 N13 N33
    Date: 2018
  12. By: Grafeneder-Weissteiner, Theresa; Prettner, Klaus; Südekum, Jens
    Abstract: Economic development in industrialized countries is characterized by rising per capita GDP, increasing life expectancy, and an ever larger share of the population living in cities. We explain this pattern within a regional innovation-driven economic growth model with labor mobility and a demographic structure of overlapping generations. The model shows that there is a natural tendency for core-periphery structures to emerge in modern knowledge-based economies.
    Keywords: agglomeration,migration,innovation,growth,demography,urbanization,core-periphery structure,regional inequality
    JEL: J10 O30 O41 R23
    Date: 2018
  13. By: Danladi Galadima, Mukhtar; Wambai Aminu, Abubakar
    Abstract: This paper investigates asymmetric cointegration, asymmetric adjustment, and causality between natural gas consumption and economic growth in Nigeria using the momentum threshold autoregressive (M-TAR) model and the Granger-causality test in a momentum threshold error correction model (M-TECM). The results revealed evidence of asymmetric cointegration, asymmetric adjustment which suggests that the negative discrepancies from the equilibrium error adjust more rapidly than the positive discrepancies and that there is bidirectional causality between the two variables. The implication of the results is that a shock that decreases the impact of natural gas consumption on economic growth adjusts more rapidly than a shock that increases it and that a consistent natural gas supply increases growth and similarly a rise in growth leads to rise in natural gas consumption. Therefore, policymakers in Nigeria need to confine more attention to the shocks stemming from the decrease in natural gas consumption and the country should adopt energy exploration policies.
    Keywords: Keywords: Asymmetric Cointegration, Asymmetric Adjustment, Causality, Natural Gas Consumption, Economic Growth
    JEL: Q43
    Date: 2017–11–30
  14. By: Njindan Iyke, Bernard; Ho, Sin-Yu
    Abstract: Inflation and inflation uncertainty are critical factors influencing the functioning of markets, and thus the efficient flow of economic activities. In this study, we investigated the effects of inflation and inflation uncertainty on growth in Ghana. Unlike majority of the previous studies, we distinguished the short-run effects of inflation and inflation uncertainty on growth from the long-run effects. Also, unlike the previous studies, we examined whether increases in inflation uncertainty have the same effects on growth as decreases in it. By taking linear and nonlinear specifications to a dataset covering the period 1963 to 2015, we found that inflation has both short and long-run negative effects on growth. Inflation uncertainty has differential short-run effect and a negative long-run effect on growth. Increases in inflation uncertainty hurt growth, while decreases may reverse this pattern but slowly. Both inflation and inflation uncertainty are critical determinants of growth in the country. To promote growth, policymakers should continue to pursue a lower inflation target, while ensuring minimum inflation uncertainty.
    Keywords: Inflation; Inflation Uncertainty; Growth; Ghana
    JEL: C22 E31 O47 O55
    Date: 2018–03

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