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on Economic Growth |
| By: | Gene Grossman (Princeton University); Elhanan Helpman (Harvard University); Ezra Oberfield (Princeton University); Thomas Sampson (LSE) |
| Abstract: | We explore the possibility that a global productivity slowdown is responsible for the widespread decline in the labor share of national income. In a neoclassical growth model with endogenous human capital accumulation a la Ben Porath (1967) and capital-skill complementarity a la Grossman et al. (2017), the steady-state labor share is positively correlated with the rates of capital-augmenting and labor-augmenting technological progress. We calibrate the key parameters describing the balanced growth path to U.S. data for the early postwar period and find that a one percentage point slowdown in the growth rate of per capita income can account for between one half and all of the observed decline in the U.S. labor share. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed018:169&r=gro |
| By: | Diallo, Ibrahima Amadou |
| Abstract: | In this paper, we introduce a new variable called Internal Violence Index (IVI) and study its effects on economic growth both theoretically and empirically. The first part builds a stochastic endogenous growth model which demonstrates that Internal Violence harms economic growth. On the theoretical side, this paper is the first to introduce a fully-micro-founded endogenous economic growth model that illustrates the explicit effect of Internal Violence on long-run growth in a stochastic dynamic optimization in continuous time framework. On the empirical side, this paper is also the first to employ Linear Regressions and Instrumental Variables Estimations techniques to empirically study the impact of Internal Violence on economic growth. The empirical results corroborate the theoretical predictions that Internal Violence acts negatively on economic growth. The negative impact of Internal Violence on growth are maintained when we use alternative measurements of Internal Violence and subsamples of Least Developed Countries (LDCs) and Non Least Developed Countries. |
| Keywords: | Linear Regressions; Instrumental Variables Estimations; Endogenous Growth Theory; Stochastic Dynamic Optimization in Continuous Time; Internal Violence Index; Internal Armed Conflict, Criminality, Terrorism, Political Violence |
| JEL: | C61 C63 K14 O41 O47 O50 |
| Date: | 2018–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:88285&r=gro |
| By: | Aghion, Philippe (London School of Economics); Bircan, Cagatay (European Bank for Reconstruction and Development) |
| Abstract: | We provide an outline for viewing the middle-income trap through the lens of the Schumpeterian growth paradigm, which places the notion of creative destruction at the center of economic growth. Economic growth and development come from the interplay between changes in economic structure and supporting institutions at different stages of development, i.e., structural transformation. We present a view of the process of economic development that takes the microlevel growth of firms and their competitive interaction as its building blocks. We discuss how institutional factors affect the evolution of these building blocks in understanding growth outcomes at different stages of development. |
| Keywords: | competition; creative destruction; middle-income trap; Schumpeterian growth |
| JEL: | O10 O11 O30 O40 |
| Date: | 2017–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0521&r=gro |
| By: | Nuno Palma (Department of Economics, University of Manchester and CEPR); Jaime Reis (Instituto de Ciências Sociais, Universidade de Lisboa) |
| Abstract: | We construct the first time-series for Portugal’s per capita GDP for 1527-1850, drawing on a new database. Starting in the early 1630s there was a highly persistent upward trend which accelerated after 1710 and peaked 40 years later. At that point, per capita income was high by European standards, though behind the most advanced Western European economies. But as the second half of the eighteenth century unfolded, a phase of economic decline was initiated. This continued into the nineteenth century, and by 1850 per capita incomes were not different from what they had been in the early 1530s. |
| Keywords: | Early Modern Portugal, Historical National Accounts, Standards of Living Debate, the Little Divergence, Malthusian Model. |
| JEL: | N13 O52 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:hes:wpaper:0137&r=gro |
| By: | Kouton, Jeffrey |
| Abstract: | There are many recent studies on African countries about the relationship between education expenditure and economic growth. However, the case of Côte d’Ivoire has been so far neglected. The aim of this paper is then to investigate that relationship for Côte d’Ivoire for the period from 1970 to 2015. We applied the Pesaran et al. (2001) bounds testing approach, estimated an ARDL model and used the Toda and Yamamoto (1995) causality test. The study provides evidence of the existence of a negative and significant long term effect of government education expenditure on economic growth for the aforementioned period. Moreover, there is a non-significant positive effect of government education expenditure on economic growth in the short term. The results show a unidirectional causality relationship between the two variables, running from education expenditure to economic growth. These findings are consistent with some results in the empirical literature and, first, indicate that government education expenditure does not stimulate economic growth in Côte d’Ivoire. This may be due to low levels of government education expenditures and the inefficiency with which these expenditures are converted into human capital stock and thus into economic growth. Second, policies aiming to invest more in education are important for more production and more economic growth. |
| Keywords: | ARDL bound test, Causality, Education expenditure, Economic growth |
| JEL: | C23 H52 I25 O55 |
| Date: | 2018–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:88350&r=gro |
| By: | Asongu, Simplice; Odhiambo, Nicholas |
| Abstract: | We analyze the evolution of fast emerging economies of the BRICS (Brazil, Russia, India, China & South Africa) and MINT (Mexico, Indonesia, Nigeria & Turkey) countries, by assessing growth determinants throughout the conditional distributions of the growth rate and real GDP output for the period 2001-2011. An instrumenal variable (IV) quantile regression approach is complemented with Two-Stage-Least Squares and IV Least Absolute Deviations. We find that the highest rates of growth of real GDP per head, among the nine countries of this study, corresponded to China, India, Nigeria, Indonesia and Turkey, but the highest increases in real GDP per capita corresponded, in descending order, to Turkey China, Brazil, South Africa and India. This study analyzes the impacts of several indicators on the increase of the rate of growth of real GDP and on the logarithm of the real GDP. We analyze several limitations of the methodology, related with the selection of the explained and the explanatory variables, the effect of missing variables, and the particular problems of some indicators. Our results show that Net Foreign Direct Investment, Natural Resources, and Political Stability have a positive and significant impact on the rate of growth of real GDP or on real GDP. |
| Keywords: | Economic Growth; Emerging countries; Quantile regression |
| JEL: | C52 F21 F23 O40 O50 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:88523&r=gro |
| By: | Nguyen, Quoc Hung |
| Abstract: | We develop a tractable two-sector endogenous growth model in which heterogeneous entrepreneurs face borrowing constraints and the government collects tax to fund public eduction. This model is isomorphic to a Uzawa-Lucas model and there exists a balanced-growth path equilibrium in which the growth rate depends on the financial deepening level. We show that the policy tax rate exerts inverted U-shaped effects on the growth rate. Additionally, at the optimal policy tax rates the model's predictions are consistent with correlational regularities documented from 35 OECD countries with regards to financial deepening, factor accumulation and working hours. |
| Keywords: | Heterogeneity; Financial Deepening; Endogenous Growth |
| JEL: | E10 E22 E44 O16 |
| Date: | 2018–04–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:88328&r=gro |