nep-gro New Economics Papers
on Economic Growth
Issue of 2018‒06‒25
seven papers chosen by
Marc Klemp
University of Copenhagen

  1. The Cultural Divide By Klaus Desmet; Romain Wacziarg
  2. Ancestral Characteristics of Modern Populations By Giuliano, Paola; Nunn, Nathan
  3. Is a positive relationship between fertility and economic development emerging at the sub-national regional level? Theoretical considerations and evidence from Europe By Fox, Jonathan; Klüsener, Sebastian; Myrskylä, Mikko
  4. Growth Volatility and Inequality in the U.S.: A Wavelet Analysis By Shinhye Chang; Rangan Gupta; Stephen M. Miller; Mark E. Wohar
  5. Are Ideas Getting Harder to Find? By Bloom, Nicholas A.; Jones, Charles I.; Van Reenen, John; Webb, Michael
  6. Inflation-growth nexus in Botswana: Can lower inflation really spur growth in the country? By Gosego Mothuti; Andrew Phiri
  7. Exploring Long Run Structural Change with a Dynamic General Equilibrium Model By Wolfgang Britz; Roberto Roson

  1. By: Klaus Desmet; Romain Wacziarg
    Abstract: This paper conducts a systematic quantitative study of cultural convergence and divergence in the United States over time. Using the General Social Survey (1972-2016), we assess whether cultural values have grown more or less heterogeneous, both overall and between groups. Groups are defined according to 11 identity cleavages such as gender, religion, ethnic origin, family income quintiles, geographic region, education levels, etc. We find some evidence of greater overall heterogeneity after 1993 when averaging over all available values, yet on many issues heterogeneity changes little. The level of between-group heterogeneity is extremely small: the United States is very pluralistic in terms of cultural attitudes and values, but this diversity is not primarily the result of cultural divides between groups. On average across cleavages and values, we find evidence of falling between-group heterogeneity from 1972 to the late 1990s, and growing divides thereafter. We interpret these findings in light of a model of cultural change where intergenerational transmission and forces of social influence determine the distribution of cultural traits in society.
    JEL: D70 Z1
    Date: 2018–05
  2. By: Giuliano, Paola (University of California, Los Angeles); Nunn, Nathan (Harvard University)
    Abstract: We construct a database, with global coverage, that provides measures of the cultural and environmental characteristics of the pre-industrial ancestors of the world's current populations. In this paper, we describe the construction of the database, including the underlying data, the procedure to produce the estimates, and the structure of the final data. We then provide illustrations of some of the variation in the data and provide an illustration of how the data can be used.
    Keywords: historical development, persistence, cultural traits, political institutions
    JEL: N00 Z10 Z13
    Date: 2018–05
  3. By: Fox, Jonathan; Klüsener, Sebastian; Myrskylä, Mikko
    Abstract: Evidence for nation-states suggests that the long-standing negative relationship between fertility and economic development might turn positive at high levels of development. The robustness of the reversal continues to be debated. We add to this discussion from a novel angle by considering whether such a reversal could also occur at the sub-national level within highly developed countries. Our contributions are both theoretical and empirical. We first discuss important trends which might foster the emergence of a positive fertility–development relationship across regions of highly developed countries. These include shifts in family policies, changes in the spatial organisation of the economic sphere, and selective international and internal migration processes. In order to explore whether we observe tendencies towards a reversal, we investigate data covering 20 European countries subdivided in 256 regions between 1990 and 2012. We document a weakening of the negative relationship between fertility and economic development within many countries, and among some countries the emergence of a positive relationship. These findings do not seem to be driven by postponement effects alone. However, there is substantial variation in the fertility and the eco
    Keywords: fertility; income; economic development; sub-national regions; regional variations; Europe
    JEL: N0
    Date: 2018–05–08
  4. By: Shinhye Chang (University of Pretoria); Rangan Gupta (University of Pretoria); Stephen M. Miller (University of Nevada, Las Vegas); Mark E. Wohar (University of Nebraska at Omaha)
    Abstract: This study applies wavelet coherency analysis to explore the relationship between the U.S. economic growth volatility, and income and wealth inequality measures over the period 1917 to 2015 and 1962 to 2014. We consider the relationship between output volatility during positive and negative growth scenarios. Wavelet analysis simultaneously examines the correlation and causality between two series in both the time and frequency domains. Our findings provide evidence of positive correlation between the volatility and inequality across high (short-run)- and low-frequencies (long-run). The direction of causality varies across frequencies and time. Strong evidence exists that volatilities lead inequality at low-frequencies across income inequality measures from 1917 to 1997. After 1997, however, the direction of causality changes. In the time-domain, the time-varying nature of long-run causalities implies structural changes in the two series. These findings provide a more thorough picture of the relationship between the U.S. growth volatility and inequality measures over time and frequency domains, suggesting important implications for policy makers.
    Keywords: Growth volatility, Income and Wealth Inequalities, Wavelet analysis
    JEL: C49 O15
    Date: 2018–06
  5. By: Bloom, Nicholas A. (Stanford University); Jones, Charles I. (Stanford University); Van Reenen, John (Massachusetts Institute of Technology); Webb, Michael (Stanford University)
    Abstract: In many growth models, economic growth arises from people creating ideas, and the long-run growth rate is the product of two terms: the effective number of researchers and their research productivity. We present a wide range of evidence from various industries, products, and firms showing that research effort is rising substantially while research productivity is declining sharply. A good example is Moore's Law. The number of researchers required today to achieve the famous doubling every two years of the density of computer chips is more than 18 times larger than the number required in the early 1970s. Across a broad range of case studies at various levels of (dis)aggregation, we find that ideas--and in particular the exponential growth they imply--are getting harder and harder to find. Exponential growth results from the large increases in research effort that offset its declining productivity.
    Date: 2017–09
  6. By: Gosego Mothuti (Department of Economics, Nelson Mandela University); Andrew Phiri (Department of Economics, Nelson Mandela University)
    Abstract: Does inflation affect economic growth in Botswana over the short-run and long-run? In applying bounds procedure for modelling ARDL cointegation effects applied to empirical data collected between 1975 and 2016 we find that this hypothesis does not hold true for Botswana as inflation is found to be insignificantly related with economic growth over both the short and long-run. Our growth equation estimates point to increased exports and an appreciated Pula currency as having a significant positive effect on steady-state GDP growth. Further empirical exercises show that an appreciated Pula increases inflation whilst a depreciated Pula decreases inflation for the Botswana economy. Policymakers should be this aware that attainment of lower inflation rates which occurs through a depreciated Pula/Dollar currency will only retard economic growth.
    Keywords: Inflation, Economic growth, Exchange rates, Bank of Botswana, Nonlinear autoregressive distributive lag (N-ARDL) model.
    JEL: C13 C32 C52 E31 F43
    Date: 2018–06
  7. By: Wolfgang Britz (Institute for Food and Resource Economics, University of Bonn); Roberto Roson (Department of Economics, University Of Venice Cà Foscari; IEFE Bocconi University)
    Abstract: In this paper we present a computable general equilibrium model (G-RDEM), specifically designed for the generation of long run scenarios of economic development, featuring a non-homothetic demand system, endogenous saving rates, differentiated industrial productivity growth, interest payments on foreign debt and time-varying input-output coefficients. To the best of our knowledge, this is the first model of this kind. We illustrate how parameters of the five modules of structural change have been estimated, and we test the model by comparing its results with those obtained by a more conventional recursive dynamic CGE model. Both models are driven by the same GDP and population data, exogenously provided by the IPCC Shared Socio-economic Pathway 3. GDP levels determine the endogenous productivity parameters. Population affects the definition of per capita income, which in turn affects the household demand system and the variation of input-output coefficients. Information on the demographic structure is also employed to modify the aggregate saving rate parameters. It is found that the two models do produce different findings, both globally and at the regional and industrial level. Understanding the origins of such differences sheds some light on how mechanisms of structural change operate in the long run.
    Keywords: Computable General Equilibrium models; Long-run economic scenarios; Structural change
    JEL: C68 C82 C88 D58 E17 F43 O11 O40
    Date: 2018

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