nep-gro New Economics Papers
on Economic Growth
Issue of 2018‒04‒23
eight papers chosen by
Marc Klemp
University of Copenhagen

  1. Pre-colonial Religious Institutions and Development: Evidence through a Military Coup By Adeel Malik; Rinchan Ali Mirza
  2. Can Two Consecutive Generations’ Data Predict Longterm Intergenerational Transition? Evidence from China with three generations By He Zhu; Tsunehiro OTSUKI
  3. Variety, Competition, and Population in Economic Growth: Theory and Empirics By Alberto Bucci; Lorenzo Carbonari; Giovanni Trovato
  4. Corruption, Mortality and Fertility Rates, and Development By Kiyoka Akimoto
  5. Does size matter? Implications of household size for economic growth and convergence By Kufenko, Vadim; Geloso, Vincent; Prettner, Klaus
  6. Do remittances enhance the economic growth effect of private health expenditures in West African Economic and Monetary Union? By Komivi Afawubo; Mawuli Kodjovi Couchoro
  7. Wealth Distribution in the Endogenous Growth Model with Idiosyncratic Investment Risk By HIRAGUCHI Ryoji
  8. Capital Accumulation Game with Quasi-Geometric Discounting and Consumption Externalities By Koichi Futagami; Kiyoka Akimoto

  1. By: Adeel Malik; Rinchan Ali Mirza
    Abstract: This paper offers a novel illustration of the political economy of religion and development by empirically examining the impact of religious shrines on development. Compiling a unique database covering the universe of holy Muslim shrines across Pakistani Punjab, we show that historically embedded religious power shapes persistent differences in literacy. Using the 1977 military take-over as a universal shock, our difference-in-differences analysis suggests that areas with a greater concentration of shrines recognized by the British colonial administration experienced a substantially retarded growth in literacy. We argue that this literacy disadvantage in shrine-dominated regions is largely attributable to a growingly prominent role of shrine elites in electoral politics and their direct control over allocation of public goods since the 1977 military coup. Our analysis suggests that shrines in these regions represent the confluence of three forces—religion, land and politics —that together constitute a powerful structural inequality with potentially adverse consequences for development.
    JEL: I25 N55 Z12 O15
    Date: 2018
  2. By: He Zhu (Graduate student of Osaka School of International Public Policy, Osaka University); Tsunehiro OTSUKI (Professor, Osaka School of International Public Policy, Osaka University)
    Abstract: Most of the studies on long-term intergenerational human capital transition are restricted to two consecutive generations based on the Becker-Tomes model, and assume that the transition will be wiped out during the third generation. However, in developing countries such as China, ancestors play a key role in the family decision-making process. Thus, this research uses a data set of China rural households, which includes three generations of data,to analyze the long-term intergenerational transition. The results provide empirical evidence that separate generations have had an independent and significant influence on the offspring’s human capital outcome. Precisely, the grandparent generation influences the child generation independently rather than influencing the child generation through the parent generation. Therefore, the influence of generations on educational achievements has been overestimated by the data that only encompass two consecutive generations.
    JEL: O14 J62
  3. By: Alberto Bucci (Università di Milano, DEMM & FinGro Lab); Lorenzo Carbonari (CEIS & DEF, University of Rome "Tor Vergata"); Giovanni Trovato (CEIS & DEF, University of Rome "Tor Vergata")
    Abstract: We provide aggregate macroeconomic evidence on how, in the long-run, a diverse degree of production-complexity may affect not only the rate of economic growth, but also the correlation between the latter, population growth and the monopolistic (intermediate) markups. For a sample of OECD economies, we find that the losses due to more complexity in production are lower than the corresponding specialization gains. According to our theoretical model, this implies that the impact of population change on economic growth is slightly positive. Using a Finite Mixture Model, we also classify the countries in the sample and verify for each cluster the impact that the population growth rate and the intermediate sector's markups exert on the 5-year average real GDP growth rate.
    Keywords: Economic growth; Population growth; Variety-expansion; Specialization; Complexity; Product market competition.
    JEL: O3 O4 J1
    Date: 2018–04–09
  4. By: Kiyoka Akimoto (Graduate School of Economics, Osaka University)
    Abstract: Mortality and fertility rates have an important in uence on economic devel- opment, while corruption also plays a role. This study examines the relationships among corruption, fertility and mortality rates, and economic development. The model is based on a three-period overlapping generations model in which agents are divided into two groups, households and bureaucrats. Households decide the number of children and bureaucrats supply public health services. All agents face mortality rates in the second period. As the empirical evidence indicates, we show that mortality and fertility rates affect development. We emphasize that corrup- tion determines the mortality rate and that the mortality rate affects corruption. Moreover, a two-way causal relationship exists between corruption and economic development. Therefore, three steady states can arise: the steady state of the early stage of development is characterized by a high level of corruption and high mortality and fertility rates; the steady state of the late stage is characterized by no corruption and low mortality and fertility rates; and the steady state of the middle stage is characterized by bureaucrats' mixed strategy whether they engage in corruption.
    Keywords: Bureaucratic corruption, Economic development, Mortality, Fertility
    JEL: D73 J18 O11
    Date: 2018–04
  5. By: Kufenko, Vadim; Geloso, Vincent; Prettner, Klaus
    Abstract: We assess the effects of changes in household size on the long-run evolution of living standards and on cross-country convergence. When the observed changes in average household size across countries are taken into consideration, growth in living standards is slower throughout the 20th century as compared to a measure based on per capita GDP. Furthermore, the speed of divergence between different countries before 1950 is faster and the speed of convergence after 1950 is slower after adjusting for the evolution in household size.
    Keywords: divergence,convergence,long-run growth,changing household size,demography
    JEL: J11 O11 O47
    Date: 2018
  6. By: Komivi Afawubo (CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine); Mawuli Kodjovi Couchoro (CERFEG - Centre de Recherche et de Formation en Science Economique et de Gestion - Université de Lomé)
    Abstract: In this paper, we empirically analyze the relationship between private health expenditures and economic growth in West African Economic and Monetary Union (WAEMU), and the extent to which remittances moderate this relationship in a panel of WAEMU countries over the period 2000-2014. We use an endogenous growth model employing Fully Modified Ordinary Least Squares (FMOLS) and Ordinary Least Squares (OLS) methods. Our empirical results show that remittances have a positive and significant effect on economic growth. However, an increase in private health expenditures negatively affects the economic growth rate. Health expenditures may not lead to an increase in the level of human skills and an accumulation of human capital, and this situation decelerates economic growth. Furthermore, the interaction between remittances and private health expenditures has a negative effect on economic growth. These findings can be explained by the fact that the financing of private health expenditure through remittances is insufficient and inefficient and thus does not contribute to improving health status and building up human capital, which would play a part in economic growth.
    Date: 2017
  7. By: HIRAGUCHI Ryoji
    Abstract: In this paper, we study the continuous time Uzawa-Lucas growth model with physical and human capital accumulation, and study the relationship between economic growth and wealth inequality. Human capital accumulation is deterministic, but investment in physical capital is subject to the idiosyncratic risk. There exists a unique balanced growth path, and the stationary wealth distribution along the path is double Pareto. We show that the increase in efficiency in human capital accumulation raises economic growth, and further equalizes wealth distribution. We also consider a case with linear tax on risky physical capital, and show that capital tax reduces the degree of wealth inequality.
    Date: 2018–02
  8. By: Koichi Futagami (Graduate School of Economics, Osaka University); Kiyoka Akimoto (Faculty of Sociology, Nara University)
    Abstract: This study introduces quasi-geometric discounting into a simple growth model of common capital accumulation that takes consumption externalities into account. We examine how present bias affects economic growth and welfare, and we consider two equilibrium concepts: the noncooperative Nash equilibrium (NNE) and the cooperative equilibrium (CE). We show that the growth rate in the NNE can be higher than that in the CE if individuals strongly admire the consumption of others regardless of the magnitude of present bias. Contrary to the results in the time-consistent case, we show that, when present bias is incorporated, the welfare level in the NNE can be higher than that in the CE in the initial period. However, in later periods, this relationship can be reversed depending on the difference in the speed of capital accumulation.
    Keywords: Capital accumulation game, Quasi-geometric discounting, Consumption externalities
    JEL: C73 E21 Q21
    Date: 2018–04

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