nep-gro New Economics Papers
on Economic Growth
Issue of 2019‒08‒26
nine papers chosen by
Marc Klemp
University of Copenhagen

  1. On the Economic Origins of Restrictions on Women's Sexuality By Anke Becker
  2. Devotion and Development: Religiosity, Education, and Economic Progress in 19th-Century France By Mara P. Squicciarini
  3. Ethnic Diversity and Inequality in sub-Saharan Africa: Do Institutions Reduce the Noise? By Kazeem B. Ajide; Olorunfemi Y. Alimi; Simplice A. Asongu
  4. Climate Change Expectations and Endogenous Economic Growth in the DICE Model By Anna Sophia Ciesielski
  5. Long-Term Macroeconomic Effects of Climate Change: A Cross-Country Analysis By Matthew E. Kahn; Kamiar Mohaddes; Ryan N.C. Ng; M. Hashem Pesaran; Mehdi Raissi; Jui-Chung Yang
  6. Technology Gaps, Trade and Income By Thomas Sampson
  7. "Transition to a Modern Regime and Change in PlantLifecycles: A Natural Experiment from Meiji Japan" By Tomihiro Machikita; Tetsuji Okazaki
  8. Relative impact of domestic and foreign public debt on economic growth in South Africa By Saungweme, Talknice; Odhiambo, Nicholas M
  9. Automation, Economic Growth, and the Labor Share - A Comment on Prettner (2019) - By Burkhard Heer; Andreas Irmen

  1. By: Anke Becker
    Abstract: This paper studies the origins and function of customs aimed at restricting women’s sexuality, such as a particularly invasive form of female genital cutting, restrictions on women’s freedom of mobility, and norms about their sexual behavior. The analysis tests the anthropological theory that a particular form of pre-industrial subsistence – pastoralism – favored the adoption of such customs. Pastoralism was characterized by heightened paternity uncertainty due to frequent and often extended periods of male absence from the settlement, implying larger payoffs to imposing restrictions on women’s sexuality. Using within-country variation across 500,000 women in 34 countries, the paper shows that women from historically more pastoral societies (i) are significantly more likely to have undergone infibulation, the most invasive form of female genital cutting; (ii) adhere to more restrictive norms about women’s promiscuity; (iii) are more restricted in their freedom of mobility. Instrumental variable estimations that make use of the ecological determinants of pastoralism support a causal interpretation of the results. The paper further shows that the mechanism behind these patterns is indeed male absence, rather than male dominance, per se, or historical economic development.
    Keywords: infibulation, female sexuality, paternity uncertainty, concern about women’s chastity
    JEL: I15 N30 Z13
    Date: 2019
  2. By: Mara P. Squicciarini
    Abstract: This paper uses a historical setting to study when religion can be a barrier to the diffusion of knowledge and economic development, and through which mechanism. I focus on 19th-century Catholicism and analyze a crucial phase of modern economic growth, the Second Industrial Revolution (1870-1914) in France. In this period, technology became skill-intensive, leading to the introduction of technical education in primary schools. At the same time, the Catholic Church was promoting a particularly antiscientific program and opposed the adoption of a technical curriculum. Using data collected from primary and secondary sources, I exploit preexisting variation in the intensity of Catholicism (i.e., religiosity) among French districts and cantons. I show that, despite a stable spatial distribution of religiosity over time, more religious locations had lower economic development only during the Second Industrial Revolution, but not before. Schooling appears to be the key mechanism: more religious areas saw a slower introduction of the technical curriculum and instead a push for religious education. Religious education, in turn, was negatively associated with industrial development about 10 to15 years later, when school-aged children entered the labor market, and this negative relationship was more pronounced in skill-intensive industrial sectors.
    Keywords: human capital, religiosity, industrialization
    JEL: J24 N13 Z12
    Date: 2019
  3. By: Kazeem B. Ajide (University of Lagos, Lagos, Nigeria); Olorunfemi Y. Alimi (University of Lagos, Lagos, Nigeria); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: Studies on the causes of income differences between the rich and the poor have received an extensive attention in the inequality empirics. While ethnic diversity hasalso been identified as one of the fundamental causes of income inequality, the role of institutions as a mediating factor in the ethnicity-inequality nexus has not received the scholarly attention it deserves. To this end, this study complements the existing literature by investigating the extent to which institutional framework corrects the noisy influence originating from the nexus between “ethnic diversity†and inequality in 26 sub-Saharan African countries for the period 1996-2015. The empirical evidence is based on pooled OLS, fixed effects and system GMM estimators. The main findings reveal that the mediating influences of institutional settingsaredefective, thus making it extremely difficult to modulatethe noisy impacts of ethno-linguistic and religious heterogeneity on inequality. In addition, the negative influencesorchestrated by ethnolinguistic and religious diversities on inequality fail toattenuate the impact of income disparityeven when interacted with institutions. On the policy front, institutional reforms tailored toward economic, political and institutional governances should be targeted.
    Keywords: Linguistic, religious, ethnicity, inequality, Institutions, Kuznets curve
    JEL: C23 D02 D63 E02
    Date: 2019–01
  4. By: Anna Sophia Ciesielski
    Abstract: This paper studies the investment based growth rate effects of climate change. The analysis is based on the Integrated Assessment Model DICE by Nordhaus (2008). I depart from the original model, in that endogenous investments into a knowledge stock drive economic growth. Due to a negative capital accumulation as well as savings effect on the knowledge stock, climate change has a negative impact on gross income that lasts into the long run. In order to be able to quantify the growth rate effects, I calibrate the endogenous growth model version of DICE towards its exogenous growth counterpart. I find that in the exogenous growth model version of DICE, compared to its endogenous growth equivalent, in the social optimum, gross income is over-estimated by 2.3 % in 2100 and by 6.8 % in 2150.
    Keywords: endogenous economic growth and climate change
    JEL: O44 Q54
    Date: 2019
  5. By: Matthew E. Kahn; Kamiar Mohaddes; Ryan N.C. Ng; M. Hashem Pesaran; Mehdi Raissi; Jui-Chung Yang
    Abstract: We study the long-term impact of climate change on economic activity across countries, using a stochastic growth model where labour productivity is affected by country-specific climate variables—defined as deviations of temperature and precipitation from their historical norms. Using a panel data set of 174 countries over the years 1960 to 2014, we find that per-capita real output growth is adversely affected by persistent changes in the temperature above or below its historical norm, but we do not obtain any statistically significant effects for changes in precipitation. Our counterfactual analysis suggests that a persistent increase in average global temperature by 0.04°C per year, in the absence of mitigation policies, reduces world real GDP per capita by 7.22 percent by 2100. On the other hand, abiding by the Paris Agreement, thereby limiting the temperature increase to 0.01°C per annum, reduces the loss substantially to 1.07 percent. These effects vary significantly across countries. We also provide supplementary evidence using data on a sample of 48 U.S. states between 1963 and 2016, and show that climate change has a long-lasting adverse impact on real output in various states and economic sectors, and on labor productivity and employment.
    JEL: E27 Q54 R11
    Date: 2019–08
  6. By: Thomas Sampson
    Abstract: This paper studies the origins and consequences of international technology gaps. I develop an endogenous growth model where R&D efficiency varies across countries and productivity differences emerge from firm-level technology investments. The theory characterizes how innovation and learning determine technology gaps, trade and global income inequality. Countries with higher R&D efficiency are richer and have comparative advantage in more innovation-dependent industries where the advantage of backwardness is lower and knowledge spillovers are more localized. I estimate R&D efficiency by country and innovation-dependence by industry from R&D and bilateral trade data. Calibrating the model implies technology gaps, due to cross-country differences in R&D efficiency, account for around one-quarter to one-third of nominal wage variation within the OECD.
    Keywords: technology gaps, trade, technology investment, Ricardian comparative advantage, international wage inequality
    JEL: F11 F43 O14 O41
    Date: 2019
  7. By: Tomihiro Machikita (Center for South East Asia Studies (CSEAS), Kyoto University); Tetsuji Okazaki (Faculty of Economics, The University of Tokyo)
    Abstract: This paper examines how political, social, and economic regime changes affect the lifecycles of man-ufacturing plants exploiting Japan's transition from a feudal regime to a modern regime in the late nineteenth century as a natural experiment. Using plant-level data for 1902, including the foundation year of each plant, we explored how the experience-size profiles of plants differ before and after the regime change. Plants were found to grow much faster after the regime change and the accelerationof growth after the regime change was much greater for the plants in exporting industries, industries intensively using steam power, and plants adopting a corporate form. These findings suggest that access to export markets, access to modern technologies, and availability of the modern corporate form were the channels through which the regime change affected the experience-size profile ofplants. The findings on the acceleration of plant growth after the regime change are supported by the analyses of more detailed data from the silk-reeling industry.
    Date: 2019–08
  8. By: Saungweme, Talknice; Odhiambo, Nicholas M
    Abstract: This paper investigates the nexus between public debt and economic growth by testing both the impact of aggregate public debt on economic growth, as well as the relative impact of domestic and foreign public debt on economic growth in South Africa ? during the period from 1970 to 2017. The study utilises the autoregressive distributed lag (ARDL) technique to explain the underlying relationship between public debt (domestic and foreign) and economic growth. The empirical evidence from the study reveals that the impact of aggregated public debt on economic growth in South Africa is negative, both in the short run and in the long run. The results further reveal that the impact of disaggregated public debt on economic growth varies depending on the type of government debt and the time frame considered. Whereas domestic public debt is positively related to economic growth in the short run, the relationship is insignificant in the long run. Contrary, foreign public debt in South Africa is negatively associated with economic growth in the long run but is insignificant in the short run. In line with the empirical evidence, the study recommends that appropriate domestic public debt policies be pursued in South Africa, in order to improve economic growth. However, the study cautions the country against growing foreign public debt as this was found to have devastating economic growth consequences in the long run.
    Keywords: Public debt, domestic public debt, foreign public debt, economic growth, South Africa, ARDL
    Date: 2019–08
  9. By: Burkhard Heer; Andreas Irmen
    Abstract: Prettner (2019) studies the implications of automation for economic growth and the labor share in a variant of the Solow-Swan model. The aggregate production function allows for two types of capital, traditional and automation capital. Traditional capital and labor are imperfect substitutes whereas automation capital and labor are perfect substitutes. In this paper, we point to a flaw in Prettner’s analysis that invalidates his main analytical and computational findings. In contrast to Prettner, we argue that both kinds of capital are perfect substitutes as stores of value, and, therefore, must earn the same rate of return in equilibrium. Our computational analysis shows that the model dramatically overestimates the actual decline in the US labor share over the last 50 years.
    Keywords: automation, declining labor share, capital accumulation, long-run growth
    JEL: O11 O33 O41
    Date: 2019

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