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on Economic Growth |
| By: | Annalisa Frigo (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Eric Roca Fernandez (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE, Marseille, France) |
| Abstract: | This paper is concerned with the historical roots of gender equality. It proposes and empirically assesses a new determinant of gender equality: gender-specific outside options in the marriage market. In particular, enlarging women's options besides marriage - even if only temporarily - increases their bargaining power with respect to men, leading to a persistent improvement in gender equality. We illustrate this mechanism focusing on Belgium, and relate gender-equality levels in the 19th century to the presence of medieval, female-only communities called beguinages that allowed women to remain single amidst a society that traditionally advocated marriage. Combining geo-referenced data on beguinal communities with 19th-century census data, we document that the presence of beguinages was instrumental in decreasing the gender gap in literacy. The reduction is sizeable, amounting to a 5.3 % drop in gender educational inequality. |
| Keywords: | Economic Persistence, Culture, Institutions, Religion, Gender Gap |
| JEL: | I25 J16 N33 O15 O43 Z12 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2019013&r=all |
| By: | Carolyn Chisadza (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Matthew Clance (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa); Mark E. Wohar (College of Business Administration, University of Nebraska; USA. School of Business and Economics, Loughborough University, Leicestershire, LE11 3TU, UK) |
| Abstract: | This study investigates the impact of oil discoveries on conflict. We argue that rents from resources are only part of the resource curse story, with discoveries of natural resources being just as prominent. Using a new measure for oil discoveries for a global panel of countries between 1960 and 2012, we find a positive correlation between oil discoveries and conflict, controlling for regional effects and other conflict determinants. Further analysis by type of conflict reveals that the discovery of oil deposits increases intrastate conflict in relation to interstate conflict, more so ethnic violence within countries. These effects are evident within a year of discovering the oil, and are persistent for over ten years after the discovery. The results also indicate that North Africa and Middle East countries are the most affected by oil discoveries in relation to other global regions. We find similar positive effects on conflict with quantity of oil discovered, as well as the expectation of oil discoveries. Interestingly, while institutions have a significant non-linear effect on conflict, they appear to have no significant mitigating effect when interacted with oil discoveries. The implication of this result may allude to countries with natural resources needing more transparent institutions to alleviate the resource curse. Overall, we believe the results from this study will provide some further understanding to the complex nature involving natural resources and incidences of conflict. |
| Keywords: | panel data, conflict, natural resources |
| JEL: | C23 O13 O50 Q34 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201964&r=all |
| By: | Raffaele Danna (University of Cambridge) |
| Abstract: | The paper contributes to the literature focusing on the role of ideas, practices and human capital in pre-modern European economic development. It argues that studying the spread of Hindu-Arabic numerals among European practitioners allows to open up a perspective on a progressive transmission of useful knowledge from the commercial revolution to the early modern period. The analysis is based on an original database recording detailed information on over 1200 texts, both manuscript and printed. This database provides the most detailed reconstruction available of the European tradition of practical arithmetic from the late 13th to the end of the 16th century. It can be argued that this is the tradition which drove the adoption of Hindu-Arabic numerals in Europe. The dataset is analysed with statistical and spatial tools. Since the spread of these texts is grounded on inland patterns, the evidence suggests that a continuous transmission of useful knowledge may have played a role during the shift of the core of European trade from the Mediterranean to the Atlantic. |
| Keywords: | Hindu-Arabic numerals, Useful Knowledge, Human capital, Numeracy, Commercial Revolution, Pre-modern European economic development, Bill of exchange, Capabilities and skills |
| JEL: | N33 N00 J24 |
| Date: | 2019–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:cmh:wpaper:35&r=all |
| By: | Bertin Martens (European Commission – JRC); Songul Tolan (European Commission – JRC) |
| Abstract: | There is a long-standing economic research literature on the impact of technological innovation and automation in general on employment and economic growth. Traditional economic models trade off a negative displacement or substitution effect against a positive complementarity effect on employment. Economic history since the industrial revolution as strongly supports the view that the net effect on employment and incomes is positive though recent evidence points to a declining labour share in total income. There are concerns that with artificial intelligence (AI) "this time may be different". The state-of-the-art task-based model creates an environment where humans and machines compete for the completion of tasks. It emphasizes the labour substitution effects of automation. This has been tested on robots data, with mixed results. However, the economic characteristics of rival robots are not comparable with non-rival and scalable AI algorithms that may constitute a general purpose technology and may accelerate the pace of innovation in itself. These characteristics give a hint that this time might indeed be different. However, there is as yet very little empirical evidence that relates AI or Machine Learning (ML) to employment and incomes. General growth models can only present a wide range of highly diverging and hypothetical scenarios, from growth implosion to an optimistic future with growth acceleration. Even extreme scenarios of displacement of men by machines offer hope for an overall wealthier economic future. The literature is clearer on the negative implications that automation may have for income equality. Redistributive policies to counteract this trend will have to incorporate behavioural responses to such policies. We conclude that that there are some elements that suggest that the nature of AI/ML is different from previous technological change but there is no empirical evidence yet to underpin this view. |
| Keywords: | labour markets, employment, technological change, task-based model, artificial intelligence, income distribution |
| JEL: | J62 O33 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:decwpa:201808&r=all |
| By: | Martin Guzi (Masaryk University); Peter Huber (Austrian Institute for Economic Research); Stepan Mikula (Masaryk University) |
| Abstract: | We analyze the long-term impact of the resettlement of the Sudetenland after World War~II on residential migration. This event involved expulsion of ethnic Germans and almost complete depopulation of an area of a country and its rapid resettlement by 2 million Czech inhabitants. Results based on nearest neighbor matching and regression discontinuity design show a higher population churn in resettled areas that continues today. The populations in resettled areas and in the remainder of the country share similar values and do not differ statistically in terms of their propensity to give donations, attend social events, and participate in voluntary work. However, we observe that resettled settlements have fewer local club memberships, lower turnout in municipal elections, and less frequently organized social events. This finding indicates substantially lower local social capital in the resettled settlements that is likely to have caused higher residential migration. This explanation is consistent with theoretical models of the impact of social capital on migration decisions. |
| Keywords: | Migration, Social Capital, Sudetenland |
| JEL: | N44 Z10 R23 J15 |
| Date: | 2019–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:mub:wpaper:2019-07&r=all |
| By: | Akcigit, Ufuk; Dinlersoz, Emin; Greenwood, Jeremy; Penciakova, Veronika |
| Abstract: | Venture capital (VC) and growth are examined both empirically and theoretically. Empirically, VC-backed startups have higher early growth rates and initial patent quality than non-VC-backed ones. VC-backing increases a startup's likelihood of reaching the right tails of the firm size and innovation distributions. Furthermore, outcomes are better for startups matched with more experienced venture capitalists. An endogenous growth model, where venture capitalists provide both expertise and financing for business startups, is constructed to match these facts. The presence of venture capital, the degree of assortative matching between startups and financiers, and the taxation of VC-backed startups matter significantly for growth. |
| Keywords: | Endogenous Growth; mergers and acquisitions; R&D; venture capital |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13932&r=all |
| By: | Al Raee, Mueid (UNU-MERIT); De Crombrugghe, Denis (SBE, Maastricht University); Ritzen, Jo (UNU-MERIT, Maastricht University) |
| Abstract: | This chapter examines the relationship between labour productivity, capital formation, and natural resource extraction in countries with natural resource reserves. We develop a theoretical two-sector model for a closed economy that maximises consumption over time, and examine how the control variables - natural resource extraction and the savings rate - determine fixed capital investment. We find that in a closed economy, the overall labour productivity is a positive function of capital investment per labour. That is in turn related to the externally given natural resource price, natural resource reserves and the resource extraction ratio. High natural resource prices and extraction rates provide opportunities to increase the overall investment in fixed capital and thus boost the labour productivity. We empirically test this model for oil as a natural resource. The data covers 36 years from 1980 to 2015 and includes 149 countries. 85 of these countries possessed commercially recoverable oil reserves in at least a part of the time period covered. We are able to exploit the panel and carry out the estimation using two-way fixed effects. We observe that oil price has an overall positive impact on labour productivity growth in the modern sector. The savings rate and schooling are positively correlated to labour productivity growth as well as fixed capital formation per capita. We find that the oil sector variables - oil reserves and oil extraction ratio - do not contribute to labour productivity growth directly, rather through increased capital formation per capita. |
| Keywords: | structural change, natural resource curse, GCC, theoretical modelling, empirical application, capital formation |
| JEL: | E21 E24 O13 O47 Q32 |
| Date: | 2019–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2019023&r=all |
| By: | Cemal Eren Arbatli (National Research University Higher School of Economics); Quamrul H. Ashraf (Williams College); Oded Galor (Brown University); Marc Klemp (University of Copenhagen) |
| Abstract: | This research advances the hypothesis and establishes empirically that interpersonal population diversity, rather than fractionalization or polarization across ethnic groups, has been pivotal to the emergence, prevalence, recurrence, and severity of intrasocietal conflicts. Exploiting an exogenous source of variations in population diversity across nations and ethnic groups, as determined predominantly during the exodus of humans from Africa tens of thousands of years ago, the study demonstrates that population diversity, and its impact on the degree of diversity within ethnic groups, has contributed significantly to the risk and intensity of historical and contemporary civil conflicts. The findings arguably reflect the contribution of population diversity to the non-cohesivnesss of society, as reflected partly in the prevalence of mistrust, the divergence in preferences for public goods and redistributive policies, and the degree of fractionalization and polarization across ethnic, linguistic, and religious groups. |
| Keywords: | Social conflict, population diversity, ethnic fractionalization, ethnic polarization, interpersonal trust, political preferences |
| JEL: | D74 N30 N40 O11 O43 Z13 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:wil:wileco:2019-10&r=all |
| By: | Gabriele Cappelli; michelangelo.vasta@unisi.it |
| Abstract: | This paper shows that a shift towards a more centralized school system can benefit countries characterized by poor levels of human capital and large regional disparities in education. In 1911, Italy moved from a fully decentralized primary-school system towards centralisation through the Daneo-Credaro Reform. The Reform design allows us to compare treated municipalities with provincial and district capitals, which retained school autonomy. Our quasi-experiment, based on Propensity Score Matching (PSM), shows that centralisation substantially increased the pace of human capital accumulation. Treated municipalities were characterized by a 0.43 percentage-point premium on the average annual growth of literacy between 1911 and 1921. We discuss some of the channels through which the new legislation affected primary schooling and literacy, with important implications for long-term economic growth. |
| Keywords: | Human capital, school management, public policy, decentralisation, centralisation, Italy |
| JEL: | N33 N34 I21 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:802&r=all |
| By: | Monica Bozzano; Gabriele Cappelli |
| Abstract: | This paper shows how historical institutions, inherited from pre-unification regional states, cast a long shadow on the evolution of literacy across the provinces of Liberal Italy (1871-1911). Although increasing local inputs into public primary schooling were associated with higher literacy, pre-unification schooling is found to be a crucial predictor of literacy in the period under study. New provincial estimates of school efficiency based on Data Envelopment Analysis suggest that pre-unification education and parental literacy were also important determinants of the success in converting schooling into literacy |
| Keywords: | schooling, effectiveness, efficiency, human capital, education production function, economic history, institutions, reforms, Italy |
| JEL: | E02 H75 I25 N33 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:801&r=all |
| By: | Sampson, Thomas |
| 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: | International wage inequality; Ricardian comparative advantage; Technology gaps; Technology investment; Trade |
| JEL: | F11 F43 O14 O41 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13799&r=all |
| By: | Andersson, Martin (Department of Industrial Economics, Blekinge Institute of Technology (BTH), Karlskrona, and CIRCLE, Lund University); Johansson, Börje (Jönköping International Business School (JIBS) & Centre of Excellence for Science and Innovation Studies (CESIS)); Niedomysl, Thomas (Department of Human Geography, Lund University) |
| Abstract: | This paper analyses city system dynamics, based on a theoretical framework relating interaction potentials to agglomeration economies and density externalities. It employs new historical time series data on population size of cities in Sweden over two centuries (1810-2010) and introduces two schematic growth factors: (i) the intra-city potential and (ii) the extra-city potential located in in rings encircling each city. The first factor is measured by each city’s population size, while the second is a vector of distance discounted population size for each of a city’s urban rings. In this way we can explain a city’s growth as a function of its interaction potential inside the city, s well as inside the first, second hand third ring. A robust finding is that cities with large ring potentials follow different development paths than those with small ring potentials. We also find clear evidence of structural change between the two centuries (1810-1910 and 1910-2010. In the first period, city growth is positively impacted by the size of the intra-city potential, whereas the same potential dampens or reduces the growth in the second period. Moreover, the Ring I and Ring II potentials tend to switch from having negative growth stimulation in the first period to having positive stimulation in the second period. The regressions are checked for robustness by yielding consistent results when growth is measured as relative as well as absolute change. |
| Keywords: | city systems; evolution; urban growth; size distribution; spatial interaction; spatial interdependence; city networks |
| JEL: | C21 L84 R11 R12 R30 |
| Date: | 2019–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0479&r=all |
| By: | posada |
| Keywords: | Colombian Economic Growth; Cass-Koopmans-Ramsey Model; Small OpenEconomy; Technical Change; Interest Rate; Investment; Households Savings. |
| JEL: | E13 E21 E22 F41 F43 O11 O41 O54 |
| Date: | 2019–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:col:000122:017389&r=all |
| By: | Odhiambo, Nicholas M; Nyasha, Sheilla |
| Abstract: | In this study, we examined the dynamic causality between financial development and economicgrowth in the Democratic Republic of the Congo (DRC), using time-series data from 1965 to2015. Unlike some previous studies, the current study used three proxies to examine thislinkage. These are liquid liabilities as a percentage of GDP (FD1), deposit money bank assetsas a percentage of GDP (FD2), and bank deposits as a percentage of GDP (FD3). In addition,the study used savings and inflation as intermittent variables, thereby creating a multivariateGranger-causality model, and limiting the omission-of-variable bias, which has been found insome previous studies. Using the ARDL bounds testing approach, the study found that there isa short-run causal relationship between financial development and economic growth in theDRC, but the direction of causality is dependent on the proxy used to measure the level offinancial development. When financial development was proxied by liquid liabilities as apercentage of GDP, unidirectional Granger-causality was found to prevail in the short run,running from economic growth to financial development. However, when deposit money bankassets as a percentage of GDP and bank deposits as a percentage of GDP were used as proxies,causality between financial development and economic growth was found to be bidirectional,but only in the short run. The study recommends that policy efforts in the DRC should bedirected at developing both the financial sector and the real sector in the short run as bothsectors have been found to be mutually beneficial to each other in the main, in this study. |
| Keywords: | Financial Development; Economic Growth; Granger-Causality Test; Democratic Republic of Congo; DRC |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:uza:wpaper:25710&r=all |
| By: | Sulaiman, Saidu; Masih, Mansur |
| Abstract: | Stemming from the McKinnon-Shaw’s advocacy for financial liberalization in “less-developed countries” and its attendant unresolved intellectual gymnastics, the authors primarily attempt to model the relationship between; financial liberalisation and economic growth on the one hand and financial liberalisation and investment on the other. With an array of rich variable mix, necessary variable interaction terms, and improvement on some past researches whilst inculcating the Autoregressive Distributed Lag (ARDL) methodology, the study establishes the long-run and short-run relationship between financial liberalisation, investment and growth in a time series framework. Secondarily, Granger causality is also employed to determine the direction of causality between financial development and economic growth. The results obtained suggest that there is a positive long-run equilibrium relationship between financial liberalisation; investment and growth. The study also finds a causal relationship between financial development and economic growth in Nigeria. This might mean that the financial liberalisation process in Nigeria has stimulated financial development leading to significant contribution to economic growth. The results might lay credence to the view that financial development plays a crucial role in the process of economic development, as such, reducing government inefficiencies might be a choice policy in freeing resources for the development of financial institutions. |
| Keywords: | financial liberalization, growth, investment, Nigeria, ARDL |
| JEL: | C58 E43 E52 |
| Date: | 2017–12–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:95569&r=all |
| By: | Ziesemer, Thomas (UNU-MERIT) |
| Abstract: | We present semi-endogenous growth models with total-factor productivity as functions of domestic and foreign private and public R&D. In a small country case with a Cobb-Douglas TFP production function, foreign R&D drives steady-state growth and the production function can be a long-term relation in a vector-error-correction model. Marginal productivity conditions can be long-term relations for a vector-error-correction model if the functional form is of a Cobb-Douglas type or a CES function generalised to a VES function. In case of a VES function, steady states exist only for special cases of parameter restrictions. |
| Keywords: | Productivity, endogenous (un)balanced growth, public R&D expenditure, foreign spillover |
| JEL: | O38 O40 O41 H54 H87 |
| Date: | 2019–08–02 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2019025&r=all |