nep-gro New Economics Papers
on Economic Growth
Issue of 2019‒04‒01
thirteen papers chosen by
Marc Klemp
University of Copenhagen

  1. Automation and New Tasks: How Technology Displaces and Reinstates Labor By Daron Acemoglu; Pascual Restrepo
  2. Structural Change and the Fertility Transition By Ager, Philipp; Herz, Benedikt
  3. Labor share and growth in the long run By McAdam, Peter; Bridji, Slim; Charpe, Matthieu
  4. Innovation waves and technological transitions: Sweden, 1909-2016 By Taalbi, Josef
  5. The rural exodus and the rise of Europe By Thomas Baudin; Robert Stelter
  6. A global compass for the great divergence: emissions vs. production centers of gravity 1820-2008 By Caspar Sauter; Jean-Marie Grether; Nicole A. Mathys
  7. Does Higher Energy Efficiency Lower Economy-Wide Energy Use? By Sebastian Rausch; Hagen Schwerin
  8. The impact of green preferences on the relevance of history versus expectations By Andreas Schäfer; Anna Stünzi
  9. Economic growth in Africa: Does gender education still matter? By Raifu, Isiaka
  10. Economics of Climate Change: Introducing the Basic Climate Economic (BCE) Model By Lucas Bretschger; Christos Karydas
  11. Technological change, energy, environment and economic growth in Japan By Besstremyannaya, Galina; Dasher, Richard; Golovan, Sergei
  12. Energy Consumption and Economic Growth: Evidence from Vietnam By Nguyen, H.M.; Bui, N.H.; Vo, D.H.; McAleer, M.J.
  13. Carbon Pricing, Technology Transition, and Skill-Based Development By Kirill Borissov; Lucas Bretschger; Alexandra Vinogradova

  1. By: Daron Acemoglu; Pascual Restrepo
    Abstract: We present a framework for understanding the effects of automation and other types of technological changes on labor demand, and use it to interpret changes in US employment over the recent past. At the center of our framework is the allocation of tasks to capital and labor—the task content of production. Automation, which enables capital to replace labor in tasks it was previously engaged in, shifts the task content of production against labor because of a displacement effect. As a result, automation always reduces the labor share in value added and may reduce labor demand even as it raises productivity. The effects of automation are counterbalanced by the creation of new tasks in which labor has a comparative advantage. The introduction of new tasks changes the task content of production in favor of labor because of a reinstatement effect, and always raises the labor share and labor demand. We show how the role of changes in the task content of production—due to automation and new tasks—can be inferred from industry-level data. Our empirical decomposition suggests that the slower growth of employment over the last three decades is accounted for by an acceleration in the displacement effect, especially in manufacturing, a weaker reinstatement effect, and slower growth of productivity than in previous decades.
    JEL: J23 J24
    Date: 2019–03
  2. By: Ager, Philipp; Herz, Benedikt
    Abstract: This paper provides new insights on the relationship between structural change and the fertility transition. We exploit the spread of an agricultural pest in the American South in the 1890s as plausibly exogenous variation in agricultural production to establish a causal link between earnings opportunities in agriculture and fertility. Households staying in agriculture reduced fertility because children are a normal good, while households switching to manufacturing reduced fertility because of the higher opportunity costs of raising children. The lower earnings opportunities in agriculture also decreased the value of child labor which increased schooling, consistent with a quantity-quality model of fertility.
    Keywords: Agricultural Income; Fertility Transition; Industrialization; structural change
    JEL: J13 N31 O14
    Date: 2019–03
  3. By: McAdam, Peter; Bridji, Slim; Charpe, Matthieu
    Abstract: This paper establishes some stylized facts of the long run relationship between growth and labor shares using historical data for the United States (1898-2010), the United Kingdom (1856-2010), and France (1896-2010). Performing individual country time-frequency analysis, we demonstrate the existence of long-term cycles in labor share of thirty to fifty years explaining a major part of the variance in the data. Further, the impact of labor share on growth changes sign with the frequency considered from negative at high frequencies to positive at low frequencies. Finally, the positive coefficient associated with the labor share at low frequencies increases over time. JEL Classification: E24, E25, N1
    Keywords: growth, income distribution, labor share, wavelet analysis
    Date: 2019–03
  4. By: Taalbi, Josef (Department of Economic History, Lund University)
    Abstract: There are important unresolved questions about long-term trends of in- novation activity and the nature of the interplay between innovation and economic development and transformation. This study explores the promise of a literature-based innovation output indicator, constructed for the Swedish engineering industry, 1909-2016. The findings suggest a long-run increasing trend in innovations per capita. Meanwhile, product innovations have also become more complex and it is suggested that crude innovation counts underestimate the long-run innovation performance. In order to analyse innovation and economic development across different frequencies, the study uses a wavelet decomposition approach. The results suggest that innovation activity has surged in periods of intense industry rationalization and struc- tural crisis (1930s, 1970s and 2010s) and that such pulses were intimately connected to the second and third industrial revolutions.
    Keywords: Innovation; Wavelet analysis; Technological systems
    JEL: N13 O14 O31
    Date: 2019–03–20
  5. By: Thomas Baudin (Max Planck Institute for Demographic Research, Rostock, Germany); Robert Stelter (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: To assess the importance of the rural exodus in fostering the transition from stagnation to growth, we propose a unified model of growth and internal migrations. Using an original set of Swedish data, we identify the deep parameters of our model. We show that internal migration conditions had to be favorable enough to authorize an exodus out of the countryside in order to fuel the industrial development of cities and the demographic transition of the country. We then compare the respective contribution of shocks on internal migration costs, infant mortality and inequalities in agricultural productivity to the economic take-off and the demographic transition that occurred in Sweden. Negative shocks on labor mobility generate larger delays in the take-off to growth compared to mortality shocks equivalent to the Black Death. Deepening inequalities of productivity in the agricultural sector, like it has been done by enclosure movements, contributes to accelerate urbanization at the cost of depressed economic growth.
    Keywords: Europe, Sweden
    JEL: J1 Z0
    Date: 2019–01
  6. By: Caspar Sauter; Jean-Marie Grether; Nicole A. Mathys
    Abstract: We construct the world’s centers of gravity for human population, GDP and CO2 emissions by taking the best out of five recognized data sources covering the last two centuries. On the basis of a novel distorsion-free representation of these centers of gravity, we find a radical Western shift of GDP and CO2 emissions centers in the 19th century, in sharp contrast with the stability of the demographic center of gravity. Both GDP and emissions trends are reversed in the first half of the 20th century, after World War I for CO2 emissions, after World War II for GDP. Since then, both centers are moving eastward at an accelerating speed. These patterns are perfectly consistent with the lead of Western countries starting the industrial revolution, the gradual replacement of coal by oil and gas as alternative sources of energy, and the progressive catch up of Asian countries in the recent past.
    Keywords: center of gravity, growth, CO2 emissions, GDP, population, great divergence
    JEL: Q56 Q59
    Date: 2019
  7. By: Sebastian Rausch (ETH Zurich, Switzerland); Hagen Schwerin (ETH Zurich, Switzerland)
    Abstract: We develop a general equilibrium growth model with capital and energy use to examine the hypothesis that economy-wide energy use increases with energy efficiency. To obtain energy use that would have occurred in the absence of energy efficiency changes, chosen energy efficiency is induced by technological change. Viewing technological change in form of changes in the cost of capital and energy producing energy services enables us to control for the sources of energy efficiency improvements in a counterfactual setting. Calibrating the model to the post-WWII U.S. economy, we find that higher energy efficiency increased rather than reduced energy use, because lower capital cost enhanced energy use by more than the increase in energy cost reduced it. This casts strong doubts on the view that energy-saving technological change has lowered fossil energy use.
    Keywords: energy use, energy efficiency, energy rebound, efficiency paradox, Jevons paradox, energy-saving technological change, investment-specific technological change, general equilibrium, putty clay
    JEL: D13 E23 O30 O41 Q43
    Date: 2018–10
  8. By: Andreas Schäfer (University of Bath, UK); Anna Stünzi (ETH Zurich, Switzerland)
    Abstract: In an OLG model with multiple steady states we analyse the impact of endogenous environmental policies on the relevance of history and expectations for the equilibrium selection. In a polluting regime environmental preferences cause an increasing energy tax which raises the risk that the economy transits to the inferior equilibrium under pessimistic expectations. However, higher environmental preferences imply an earlier switch to the clean energy regime. Then, the conflict between production and environmental preferences is resolved and the prospects to select the superior equilibrium improve, since positive expectations become more relevant. In an empirical analysis we find that people with environmental preferences tend to have more optimistic expectations about economic development. Using these findings to analyse the steady state dynamics implies that agents with environmental preferences support higher energy taxes and switch faster to clean production. Due to their optimism, the likelihood to reach the superior stable steady state increases.
    Keywords: Expectations, Multiple Equilibria, Endogenous Taxation, Green Preferences
    JEL: Q43 O44 Q50 O11
    Date: 2018–11
  9. By: Raifu, Isiaka
    Abstract: This study examines the relevance of gender education to economic growth in Africa. This is investigated across different levels of education attainments and human capital stocks for females and males. Using the datasets of Barro and Lee (2013) and Lee and Lee (2016) which cover the period from 1960 to 2010 and static panel estimation methods (pooled, fixed effects and random effects) as well as dynamic GMM methods (one step and two step difference and system GMM) for analysis, it is found that education attainments and human capital stocks (for females and males) are indispensable to economic growth in Africa. Specifically, we find that male education attainment and human capital stock contribute more to economic growth than female education attainment and human capital stock. Based on these findings, it is imperative for governments in Africa to provide a quality education for both genders which would be based not only on theoretical learning but also on practical learning and skill development that would increase the stocks of human capital embodied in both genders. This would enable them to contribute more to economic growth of the continent.
    Keywords: Female and Male Education Attainments, Human Capital Stocks, Economic Growth
    JEL: I2 I25
    Date: 2109–03–20
  10. By: Lucas Bretschger (ETH Zurich, Switzerland); Christos Karydas (ETH Zurich, Switzerland)
    Abstract: The paper develops the Basic Climate Economic (BCE) model featuring the core elements of climate economics and climate policy. The BCE model incorpo- rates fossil stock depletion, pollution stock accumulation, endogenous growth, and climate-induced capital depreciation. We first use graphical analysis to show the effects of climate change and climate policy on economic growth. In- tuition for the different model mechanisms, the functional forms, and the effects of different climate policies is provided. We then show the model equations in mathematical terms to derive closed-form solutions and to run model simula- tions relating to the graphical part. Finally, we compare our setup to other models of climate economics.
    Keywords: Climate change, endogenous growth, climate policy, resource use, stock pollution
    JEL: Q43 O47 Q56 O41
    Date: 2018–09
  11. By: Besstremyannaya, Galina; Dasher, Richard; Golovan, Sergei
    Abstract: A considerable amount of research has shown that a carbon tax combined with research subsidies may be regarded as optimal policy for encouraging the spread of low-carbon technologies for the benefit of society. The paper exploits the macroeconomic approach of endogenous growth models with technological change in order to make a comparative assessment of the impact of such policy measures on economic growth in the US and Japan in the medium and long term. Our estimates reveal several important differences between Japanese and US energy firms: lower elasticity of the innovation production function in R&D expenditure, lower probability of radical innovation, and predominance of dirty technologies in Japan. This may explain our quantitative findings of stronger reliance on carbon tax in Japan as opposed to research subsidies in the US.
    Keywords: endogenous growth,technological change,innovation,carbon tax,energy
    JEL: O11 O13 O47 Q43 Q49
    Date: 2019
  12. By: Nguyen, H.M.; Bui, N.H.; Vo, D.H.; McAleer, M.J.
    Abstract: The importance of non-renewable, renewable and sustainable energy sources and energy consumption in the economic development strategy of a country is undeniable. The purpose of the paper is to investigate the impacts of energy consumption on the economic growth of Vietnam during the 1980-2014 period. By applying the Autoregressive Distributed Lag (ARDL) model of Pesaran et al. (2001), and the Granger causality test of Toda and Yamamoto (1995), the empirical results provide evidence that electricity consumption has positive impacts on Vietnam’s economic growth in both the short run and long run. For public policy prescriptions, the empirical evidence suggests that an exploration of new sources of renewable and sustainable energy is essential for long run economic development
    Keywords: Energy consumption, renewable and sustainable energy, economic growth, economic development, ARDL, Granger causality
    JEL: F43 O13 O47 Q42 Q43
    Date: 2019–03–01
  13. By: Kirill Borissov (European University at Saint Petersburg, Russia); Lucas Bretschger (ETH Zurich, Switzerland); Alexandra Vinogradova (ETH Zurich, Switzerland)
    Abstract: We analyze the impact of carbon prices on human capital accumulation, sectoral change, and economic growth. In our framework output is produced with dirty and/or clean technologies using skilled and unskilled labor as inputs. Carbon policy affects technology selection which transmits incentives for human capital formation. We show that a temporary policy may be sufficient for a transition to a clean economy and that such a policy also stimulates economic growth. Moreover, in the presence of inter-country knowledge spillovers, a carbon policy in the North helps human capital formation in the South and induces South’s transition to the clean steady state.
    Keywords: Carbon pricing, education, clean and dirty technologies, temporary policies
    JEL: Q43 O47 Q56 O41
    Date: 2018–01

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