nep-gro New Economics Papers
on Economic Growth
Issue of 2018‒07‒16
twelve papers chosen by
Marc Klemp
University of Copenhagen

  1. Physiological Aging around the World and Economic Growth By Dalgaard, Carl-Johan; Hansen, Casper Worm; Strulik, Holger
  2. The Origins of the Division of Labor in Pre-Modern Times By Depetris-Chauvin, Emilio; Özak, Ömer
  3. Diversity and Growth By Gradstein, Mark
  4. Transborder Ethnic Kin and Local Prosperity: Evidence from Night-Time Light Intensity in Africa By Christophe Muller; Pierre Pecher
  5. Unemployment and growth By Thomas Palley
  6. Economic Systems and Economic Growth By Zhou, Haiwen
  7. Patents in the Long Run: Theory, History and Statistics. By Claude DIEBOLT; Karine PELLIER
  8. Forced Migration and Human Capital: Evidence from Post-WWII Population Transfers By Becker, Sascha O.; Grosfeld, Irena; Grosjean, Pauline; Voigtländer, Nico; Zhuravskaya, Ekaterina
  9. Well-being Inequality in the Long Run By Prados de la Escosura, Leandro
  10. A Growth Model with Unemployment By Mina Mahmoudi; Mark Pingle
  11. Was Higher Education a Major Channel through which the United States Became an Economic Superpower in the 20th Century? By Cook, Adam; Ehrlich, Isaac
  12. The role of autonomous demand growth in a neo-Kaleckian conflicting-claims framework By Won Jun Nah; Marc Lavoie

  1. By: Dalgaard, Carl-Johan (University of Copenhagen); Hansen, Casper Worm (University of Copenhagen); Strulik, Holger (University of Goettingen)
    Abstract: As the composition of the world population gradually shifts towards older age groups, it becomes increasingly important to understand the ináuence of aging on macroeconomic outcomes of interest. Until now, however, it has been impossible to separate out the role played by demographics from the pure role of aging at the country level. Drawing on research in the Öelds of biology and medicine, the present study provides data on physiological aging. Our data shows that, over the last quarter of a century, the average person in the global labor force has not grown older in physiological terms. In an application of our panel dataset, we Önd evidence that accelerated physiological aging causally reduces labor productivity. Taken together, our analysis suggests that if productivity growth has deaccelerated in recent decades, physiological aging is unlikely to be a contributing force.Keywords: Physiological Aging; Economic Growth JEL Classification: O5; I15
    Date: 2018
  2. By: Depetris-Chauvin, Emilio (Pontificia Universidad Catolica de Chile); Özak, Ömer (Southern Methodist University)
    Abstract: This research explores the historical roots of the division of labor in pre-modern societies. It advances the hypothesis and establishes empirically that intra-ethnic diversity had a positive effect on the division of labor across ethnicities in the pre-modern era. Exploiting a variety of identification strategies and a novel ethnic level dataset combining geocoded ethnographic, linguistic and genetic data, it establishes that higher levels of intra-ethnic diversity were conducive to economic specialization in the pre-modern era. The findings are robust to a host of geographical, institutional, cultural and historical confounders, and suggest that variation in intra-ethnic diversity is the main predictor of the division of labor in pre-modern times.
    Keywords: comparative development, division of labor, economic specialization, intra-ethnic diversity, cultural diversity, population diversity, genetic diversity, linguistic diversity
    JEL: D74 F10 F14 J24 N10 O10 O11 O12 O40 O43 O44 Z10 Z13
    Date: 2018–05
  3. By: Gradstein, Mark
    Abstract: The diversity of social interaction within economic communities affects productivity and growth, and is itself shaped by economic conditions. These reciprocal effects raise the possibility of multiple equilibria, of setting a socially polarized economy stagnating in poverty on a new path of social integration and economic growth through external intervention or an internal political initiative. This paper describes a simple analytical model that captures these reciprocal effects, and sheds light on the role of government capacity, community leadership, federation and external credit or aid, in achieving economic growth through social integration.
    Date: 2018–06
  4. By: Christophe Muller (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE); Pierre Pecher (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE)
    Abstract: Ethnicity often occupies a core role in integrated social, economic, and political development processes, which have mostly been studied within specific countries. Across countries, social and economic development may be supported by political capabilities achieved by ethnic kin abroad, although there is little hard evidence on politico-economic interactions through ethnic networks. We fill this gap by providing the first robust empirical evidence of the substantial effects of political predominance of transborder ethnic kin on local economic development in Africa. This is achieved by specifying and estimating dynamic spatial models of geolocalised luminosity and matching these data with other geolocalised information on geographic, political, and ethnic characteristics. Spatial and ethnic network effects are separately identified and jointly analysed. Not only distinct spatial effects and transborder ethnic effects are exhibited, but also are their complex dynamics and spatial distribution features in terms of local development. The results draw attention to the relevance of a broader international perspective on policies affecting ethnic politics within countries.
    Keywords: local development, ethnic networks, institutions
    JEL: D72 R11 O43
    Date: 2018–05
  5. By: Thomas Palley
    Abstract: Post Keynesian (PK) growth models typically fail to model unemployment. That shows up in the absence of any equilibrium condition requiring the growth of employment equal effective labor supply growth. Consequently, the models can have an imploding or exploding unemployment rate. The underlying analytical problem is failure to resolve the Harrod (1939) knife edge problem. This paper shows how the knife-edge problem can be resolved via a Kaldor - Hicks technological progress function. The paper applies the concept to several different PK growth models. In the Harrod, super-multiplier, Cambridge, and neo-Kaleckian models the warranted rate rules the roost and natural rate forces have no impact on the equilibrium growth rate. However, in a modified neo-Kaleckian model with labor market distribution conflict both warranted rate and natural rate forces impact steady state growth.
    Keywords: Growth, unemployment, Harrod Knife-edge, endogenous technical progress, Hicks, Kaldor
    JEL: O4 O41 O33 E12
    Date: 2018
  6. By: Zhou, Haiwen
    Abstract: In a planned economy, state monopoly ensures that economies of scale are exploited. However, state monopoly could not commit to reward its workers. Anticipating this, individuals will exert less effort. In a market economy, competition among firms ensures that higher effort from workers will be rewarded. However, competition means that economies of scale are not fully exploited. Per capita output growth is generated by continuous adoption of new technologies substituting labor for capital. Growth rate in a market economy is higher than that in a planned economy when the incentive to exert effort is relatively more important.
    Keywords: Market economy, Planned economy, Economic growth, Competition, Monopoly
    JEL: O40 P50
    Date: 2018–06–08
  7. By: Claude DIEBOLT; Karine PELLIER
    Abstract: This paper examines the structural and spatial dynamics of patents in France, Germany, Japan, the United Kingdom and the United States. The time series are extracted from an international, comparative and historical database on the long term evolution of patents in 40 countries from the 17th century to 1945 and in more than 150 countries from 1945 to present (Diebolt and Pellier, 2010). We found strong proof of infrequent large shocks resulting essentially from the major economic and political events formed by the two World Wars in the twentieth century. Our results question the autonomous process, i.e. the internal dynamic of the patent systems. Wars seem to push innovation and finally the economic growth process itself. We further investigated the role of innovation in economic growth through a causality analysis between patents and GDP per capita. Our major findings support the assumption that the accumulation of innovations was a driving force only for France, the United Kingdom and the United States during the post World War II period.
    Keywords: database, cliometrics, shock analysis, patents, causality, comparisons in time and space.
    JEL: C22 C82 N70 O34
    Date: 2018
  8. By: Becker, Sascha O. (University of Warwick); Grosfeld, Irena (Paris School of Economics); Grosjean, Pauline (UNSW); Voigtländer, Nico (UCLA); Zhuravskaya, Ekaterina (Paris School of Economics)
    Abstract: We exploit a unique historical setting to study the long-run effects of forced migration on investment in education. After World War II, the Polish borders were redrawn, resulting in large-scale migration. Poles were forced to move from the Kresy territories in the East (taken over by the USSR) and were resettled mostly to the newly acquired Western Territories, from which Germans were expelled. We combine historical censuses with newly collected survey data to show that, while there were no pre-WWII differences in education, Poles with a family history of forced migration are significantly more educated today. Descendants of forced migrants have on average one extra year of schooling, driven by a higher propensity to finish secondary or higher education. This result holds when we restrict ancestral locations to a subsample around the former Kresy border and include fixed effects for the destination of migrants. As Kresy migrants were of the same ethnicity and religion as other Poles, we bypass confounding factors of other cases of forced migration. We show that labor market competition with natives and selection of migrants are also unlikely to drive our results. Survey evidence suggests that forced migration led to a shift in preferences, away from material possessions and towards investment in a mobile asset – human capital. The effects persist over three generations.
    Keywords: Poland, Forced Migration, Uprootedness, Human Capital JEL Classification: N33, N34, D74, I25
    Date: 2018
  9. By: Prados de la Escosura, Leandro
    Abstract: This paper provides a long-run view of well-being inequality at world scale based on a new historical dataset. Trends in social dimensions alter the view on inequality derived from per capita GDP. While in terms of income, inequality increased until the third quarter of the twentieth century; in terms of well-being, inequality fell steadily since World War I. The spread of mass primary education and the health transitions were its main drivers. The gap between the West and the Rest explains only partially the evolution of well-being inequality, as the dispersion within the developing regions has increasingly determined its evolution.
    Keywords: Well-being ; Inequality ; Life Expectancy ; Health Transition ; Education ; per capita GDP
    JEL: O50 O15 N30 I00
    Date: 2018–06
  10. By: Mina Mahmoudi; Mark Pingle
    Abstract: A standard growth model is modified in a straightforward way to incorporate what Keynes (1936) suggests in the "essence" of his general theory. The theoretical essence is the idea that exogenous changes in investment cause changes in employment and unemployment. We implement this idea by assuming the path for capital growth rate is exogenous in the growth model. The result is a growth model that can explain both long term trends and fluctuations around the trend. The modified growth model was tested using the U.S. economic data from 1947 to 2014. The hypothesized inverse relationship between the capital growth and changes in unemployment was confirmed, and the structurally estimated model fits fluctuations in unemployment reasonably well.
    Date: 2018–06
  11. By: Cook, Adam (Asian Development Bank Institute); Ehrlich, Isaac (Asian Development Bank Institute)
    Abstract: We offer a thesis for why the United States (US) overtook the United Kingdom (UK) and other European countries in the 20th century in both aggregate and per capita GDP as a case study of recent models of endogenous growth, where “human capital” is the engine of growth. By human capital we mean an intangible asset, best thought of as a stock of embodied and disembodied knowledge comprising education, information, entrepreneurship, and productive and innovative skills, which is formed through investments in schooling, job training, and health as well as through research and development projects and informal knowledge transfers (cf. Ehrlich and Murphy 2007). The conjecture is that the ascendancy of the US as an economic superpower in the 20th century owes considerably to its faster human capital formation relative to that of the UK and “old Europe.” We assess whether the thesis has legs to stand on through both stylized facts and a supplementary quasi-experimental empirical analysis. The stylized facts indicate that the US led other major developed countries in schooling attainments per adult population member, beginning in the latter part of the 19th century and lasting throughout the 20th century, especially at the secondary and tertiary levels. The quasi-experimental analysis constitutes the first attempt to test the hypothesis that the US’s ascendancy to a major economic power stems largely from the impact of the first Morrill Act of 1862, which launched the public higher education movement in the US through the establishment of land grant colleges and universities across the nation during the latter part of the 19th century.
    Keywords: human capital; endogenous growth; Morrill Act; higher education; treatment effects; US
    JEL: C21 H10 I20 N10 N30 O00 O40
    Date: 2018–03–09
  12. By: Won Jun Nah; Marc Lavoie
    Abstract: This paper incorporates the role of an independently growing autonomous demand component into a neo-Kaleckian model of growth and distribution where the distribution of income reacts to changes in the employment rate. A peculiar feature of these autonomous expenditures is that in contrast to investment they are non-capacity creating. The model combines the Sraffian multiplier, a conflicting-claims theory of inflation, a Harrodian instability mechanism and effects tied to the size of the reserve army of labor. The long-run version of the model converges conditionally to stable rates of employment and inflation, at the normal rate of capacity utilization. The model vindicates some of the main Keynesian or Kaleckian tenets, in the sense that an increase in the marginal propensity to save out of profits or in the bargaining power of firms generate lower average rates of capital accumulation and capacity utilization during the traverse.
    Keywords: neo-Kaleckian; wage-led growth; autonomous expenditures; conflicting claims
    JEL: E11 F41 O41
    Date: 2018

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