nep-gro New Economics Papers
on Economic Growth
Issue of 2019‒07‒15
seven papers chosen by
Marc Klemp
University of Copenhagen

  1. Diversity and Conflict By , Cemal; Ashraf, Quamrul; Galor, Oded; Klemp, Marc
  2. Staple Products, Linkages, and Development: Evidence from Argentina By Federico Droller; Martin Fiszbein
  3. The Standard Errors of Persistence By Kelly, Morgan
  4. The Hamiltonian approach to the problem of derivation of production functions in economic growth theory By Roman G. Smirnov; Kunpeng Wang
  5. Pension, Retirement, and Growth in the Presence Heterogeneous Elderly By Makoto Hirono; Kazuo Mino
  6. Public debt versus Environmental debt: What are the relevant Tradeoffs? By Mohamed Boly; Jean-Louis Combes; Pascale Combes-Motel; Maxime Menuet; Alexandru Minea; Patrick Villieu
  7. Demographic Origins of the Startup Deficit By Fatih Karahan; Benjamin Pugsley; Aysegül Sahin

  1. By: , Cemal; Ashraf, Quamrul; Galor, Oded; Klemp, Marc
    Abstract: This research advances the hypothesis and establishes empirically that interpersonal population diversity has contributed significantly to the emergence, prevalence, recurrence, and severity of intrasocietal conflicts. Exploiting an exogenous source of variations in population diversity across nations and ethnic groups, it demonstrates that population diversity, as determined predominantly during the exodus of humans from Africa tens of thousands of years ago, has contributed significantly to the risk and intensity of historical and contemporary civil conflicts. The findings arguably reflect the adverse effect of population diversity on interpersonal trust, its contribution to divergence in preferences for public goods and redistributive policies, and its impact on the degree of fractionalization and polarization across ethnic, linguistic, and religious groups.
    Keywords: ethnic fractionalization; ethnic polarization; interpersonal trust; Political Preferences; population diversity; Social conflict
    JEL: D74 N30 N40 O11 O43 Z13
    Date: 2019–06
  2. By: Federico Droller; Martin Fiszbein
    Abstract: We investigate how historical patterns of primary production influenced development across local economies in Argentina. Our identification strategy exploits exogenous variation in the composition of primary production induced by climatic features. We find that locations specializing in ranching had weaker linkages with other activities, higher concentration in land ownership, lower population density, and less immigration than cereal-producing areas. Over time, ranching localities continued to exhibit lower population density and they experienced relatively sluggish industrialization. Ultimately, ranching specialization had large negative effects on long-run levels of income per capita and human capital. Our findings show that early patterns of production can have a crucial influence on development patterns, providing suggestive support to the staple theory of economic growth.
    JEL: N16 N56 N96 O13 O14
    Date: 2019–06
  3. By: Kelly, Morgan
    Abstract: A large literature on persistence finds that many modern outcomes strongly reflect characteristics of the same places in the distant past. However, alongside unusually high t statistics, these regressions display severe spatial autocorrelation in residuals, and the purpose of this paper is to examine whether these two properties might be connected. We start by running artificial regressions where both variables are spatial noise and find that, even for modest ranges of spatial correlation between points, t statistics become severely inflated leading to significance levels that are in error by several orders of magnitude. We analyse 27 persistence studies in leading journals and find that in most cases if we replace the main explanatory variable with spatial noise the fit of the regression commonly improves; and if we replace the dependent variable with spatial noise, the persistence variable can still explain it at high significance levels. We can predict in advance which persistence results might be the outcome of fitting spatial noise from the degree of spatial autocorrelation in their residuals measured by a standard Moran statistic. Our findings suggest that the results of persistence studies, and of spatial regressions more generally, might be treated with some caution in the absence of reported Moran statistics and noise simulations.
    Date: 2019–06
  4. By: Roman G. Smirnov; Kunpeng Wang
    Abstract: We introduce a general Hamiltonian framework that appears to be a natural setting for the derivation of various production functions in economic growth theory, starting with the celebrated Cobb-Douglas function. Employing our method, we investigate some existing models and propose a new one as special cases of the general $n$-dimensional Lotka-Volterra system of eco-dynamics.
    Date: 2019–06
  5. By: Makoto Hirono (Graduate School of Economics, Doshisha University); Kazuo Mino (Graduate School of Economics, Doshisha University and Institute of Economics, Kyoto University)
    Abstract: This study explores the linkage between the labor force participation of the elderly and the long-run performance of the economy in the context of a two-period-lived overlapping generations model. We assume that the old agents are heterogeneous in their labor efficiency and they continue working if their income exceeds the pension that can be received in the case of full retirement. We inspect the long-run effects of changes in key factors that determine the labor force participation of the elderly. While the main part of the study treats a neoclassical growth model, we also discuss a model with endogenous growth.
    Keywords: retirement decision, labor force participation, population aging, pension system, capital accumulation
    JEL: E10 E62
    Date: 2019–07
  6. By: Mohamed Boly (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique); Jean-Louis Combes (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique); Pascale Combes-Motel (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique); Maxime Menuet (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique); Alexandru Minea (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique); Patrick Villieu (LEO - Laboratoire d'Economie d'Orléans - UO - Université d'Orléans - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The article explores the relationship between public debt and environmental debt. The latter is defined as the difference between the "virgin state" which is the maximum stock of environmental quality that can be kept intact with natural regenerations and the current quality of the environment. A theoretical model of endogenous growth is built. We show that there is a unique well-determined balanced-growth path. The public debt and the environmental debt are substitute in the short-run but complementary in the long-run. Indeed, budget deficit provides additional resources to finance pollution abatement spending, but generate also unproductive expenditures (the debt burden). This hypothesis is tested on a sample of 22 countries for the period 1990-2011. The environmental debt is measured by the cumulative CO2 emissions per capita. We use panel time-series estimators which allow for heterogeneity in the slope coefficients between countries. It appears mainly that, in the long term, an increase of 100% in public debt ratio leads to an increase of 74% in cumulative CO2 per capita. In addition, this positive long-run relationship is still present at the country and the sub-sample level, despite some differences in the short-term dynamics.
    Keywords: environmental debt,public debt,heterogenous panel data model
    Date: 2019–06–25
  7. By: Fatih Karahan; Benjamin Pugsley; Aysegül Sahin
    Abstract: We propose a simple explanation for the long-run decline in the startup rate. It was caused by a slowdown in labor supply growth since the late 1970s, largely pre-determined by demographics. This channel explains roughly two-thirds of the decline and why incumbent firm survival and average growth over the lifecycle have been little changed. We show these results in a standard model of firm dynamics and test the mechanism using shocks to labor supply growth across states. Finally, we show that a longer startup rate series imputed using historical establishment tabulations rises over the 1960-70s period of accelerating labor force growth.
    Keywords: Firm dynamics, Demographics, Business Dynamism, Macroeconomics
    JEL: J11 E24 D22
    Date: 2019–07

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