nep-gro New Economics Papers
on Economic Growth
Issue of 2019‒12‒09
seven papers chosen by
Marc Klemp
University of Copenhagen

  1. The long-term causal effect of U.S. bombing missions on economic development: Evidence from the Ho Chi Minh Trail and Xieng Khouang Province in Lao P.D.R. By Takahiro Yamada; Hiroyuki Yamada
  2. Can a growing world be fed when the climate is changing? By Simon Dietz; Bruno Lanz
  3. Gender Gaps in Education By Bertocchi, Graziella; Bozzano, Monica
  4. How Does the Public Spending Affect Technical Efficiency? Some Evidence from 15 European Countries By Sabrina Auci; Laura Castellucci; Manuela Coromaldi
  5. Foreign Direct Investment and Economic Growth: Simultaneous Equation Model Case of Southern Mediterranean Countries (SMC) By aidi, mohamed
  6. The nexus of trade, employment and economic growth: evidence from Palestine By Abugamea, Gaber
  7. Cointegration of Economic growth and External balance in Colombia: 1963-2016 By Baron Ortegon, Brayan Alexander

  1. By: Takahiro Yamada (Policy Research Institute, Ministry of Finance); Hiroyuki Yamada (Faculty of Economics, Keio University)
    Abstract: This study investigates the long-term causal effect of heavy U.S. bombing missions during the Vietnam War on later economic development in Lao P.D.R. The empirical strategy relies on an instrumental variables approach. We exploit the distance between the centroid of village-level administrative boundaries and heavily bombed targets-the Ho Chi Minh Trail in the case of southern Laos and Xieng Khouang province in the case of northern Laos-as an instrument for the intensity of U.S. bombing missions. We use the three rounds of average nightlight strength data (1992, 2005, and 2013), and two rounds of population density data (1990 and 2005) as the outcome variables. The estimation results show no robust effect of U.S. bombing missions on economic development in the long term. Meanwhile, we find that the results do not necessarily support the conditional convergence hypothesis within a country, although this result could be Lao-specific.
    Keywords: Conflict Damage, Economic Development, Conditional Convergence Hypothesis, Lao P.D.R
    JEL: O1 P5 H7
    Date: 2019–11–11
  2. By: Simon Dietz; Bruno Lanz
    Abstract: We study the capacity to meet food demand under conditions of climate change, economic and population growth. We take a novel approach to quantifying climate impacts, based on a model of the global economy structurally estimated on the period 1960 to 2015. The model integrates several features necessary to study the problem, including an explicit agriculture sector, endogenous fertility, directed technical change and fossil/renewable energy. We estimate the world economy is more than one trillion dollars smaller, and world population more than 80 million smaller, than would have been the case without climate change. This is despite substantial adaptation having taken place in general equilibrium through R&D and agricultural land expansion. Policy experiments with the model suggest that optimal GHG taxes are high and future temperatures held well below 2 degrees Celsius.
    Keywords: adaptation; agricultural productivity; climate change; directed technical change; energy; food security; economic growth; population growth; structural estimation
    JEL: C51 D72 O13 O44 Q54
    Date: 2019–11
  3. By: Bertocchi, Graziella (University of Modena and Reggio Emilia); Bozzano, Monica (University of Pavia)
    Abstract: This chapter reviews the growing body of research in economics which concentrates on the education gender gap and its evolution, over time and across countries. The survey first focuses on gender differentials in the historical period that roughly goes from 1850 to the 1940s and documents the deep determinants of the early phase of female education expansion, including pre-industrial conditions, religion, and family and kinship patterns. Next, the survey describes the stylized facts of contemporaneous gender gaps in education, from the 1950s to the present day, accounting for several alternative measures of attainment and achievement and for geographic and temporal differentiations. The determinants of the gaps are then summarized, while keeping a strong emphasis on an historical perspective and disentangling factors related to the labor market, family formation, psychological elements, and societal cultural norms. A discussion follows of the implications of the education gender gap for multiple realms, from economic growth to family life, taking into account the potential for reverse causation. Special attention is devoted to the persistency of gender gaps in the STEM and economics fields.
    Keywords: education, gender, gap
    JEL: J1 N3 O1
    Date: 2019–10
  4. By: Sabrina Auci (University of Palermo); Laura Castellucci (University of Rome "Tor Vergata"); Manuela Coromaldi (University of Rome “Niccolò Cusano")
    Abstract: The relationship between government size and economic growth has been widely debated. Departing from this issue, we provide an empirical analysis of the impact of government size on technical efficiency. The aim of this paper is to estimate by using a True Random Effect model the impact of public sector’s size and of public expenditure components on 15 European countries’ technical efficiency from 1996 to 2011. Using the total public expenditure as a proxy for the government size we estimate simultaneously national optimal production function and technical efficiency model by controlling for income distribution and institutional quality. Our main findings show that the effect of public sector’s size on efficiency is positive while the type of public expenditures may have both positive and negative impact. In more details, results suggest that social protection, cultural, and health expenditures have a positive effect on technical efficiency, while others have a negative impact. More controversial is the impact of education expenditure, even if a positive effect on efficiency prevails when controlling for heteroscedasticity.
    Keywords: Stochastic frontier production function, technical efficiency, government spending,European countries
    JEL: C33 H10 H50
    Date: 2019–12–02
  5. By: aidi, mohamed
    Abstract: In this work we study the effect of FDI on the economies of the South Mediterranean countries. Taking into account the positive effects and starting from the establishment of a simultaneous equation model applied to 8 countries, we tried to demonstrate the mechanisms through which FDI acts on economic growth. The estimation of our model shows that the level of human capital exports and to a lesser extent domestic investment, are the most prominent factors in creating positive effects. However, these results, while important, remain weakly motivating to generate positive growth or at least to reduce the negative effects of FDI.
    Keywords: Foreign Direct Investment, Economic Growth, Simultaneous Equation Model
    JEL: F21 O43
    Date: 2019–11–29
  6. By: Abugamea, Gaber
    Abstract: The economies, trade and employment in the Palestinian territories (PTs) in the Gaza Strip and West Bank have undergone numerous shocks and instabilities over the past four decades. Palestinian External trade experienced numerous difficulties and in particular Israel imposing for restriction on Palestinian trade with the neighboring countries and the rest of the world as a whole. Meanwhile, employment rates in PTs decreased sharply by Israeli restrictions which imposed on Palestinian labor movement into Israel since 1994 and intensified with the Palestinian uprising in 2000 year., This study uses the cointegration and Granger causality tests to examine both the long run and short run relationships among trade, employment and economic growth of Palestine for the time period 1968-2017 . The econometrics results based on vector error correction models (VECM) confirm the existence of long run relation between trade, employment and economic growth and show that both employment and GDP are main determinants of trade but not trade and GDP determinants of employment or trade and employment determinants of GDP. Causality tests confirm VECM results that changes on economic growth in the long run cause change in trade in the short run. By reconciling causality results with that of VECM, we conclude an existence of marginal causality runs from GDP to employment and from trade to employment.
    Keywords: Trade, Employment, Economic growth, Cointegration, Granger causality tests, Palestine
    JEL: E24 F14 O47
    Date: 2019–11–21
  7. By: Baron Ortegon, Brayan Alexander
    Abstract: In this paper is analyzed the relation between GDP growth and External balance in Colombia for the study period (1963-2016) by using a VECM. Supposing everything else unchanged, we conclude that Colombian external balance granger caused GDP growth and there was indeed a long run relation between both variables. This outcome helps to explain the Colombian GDP growth dynamics over the last fifty years and the impact of trade policy on economic growth.
    Date: 2018–04–07

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