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on Economic Growth |
| By: | Claude Diebolt (University of Strasbourg, Strasbourg, France); Tapas Mishra (University of Southampton, Highfield Campus, UK); Faustine Perrin (University of Strasbourg, Strasbourg, France) |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:afc:wpaper:12-19&r=all |
| By: | Herzer, Dierk |
| Abstract: | Several studies have tested semi-endogenous versus Schumpeterian growth models using different methodological approaches. This paper critically reviews these studies including their approaches and provides new evidence on this issue, by analyzing both time-series data from the United States and panel data from 19 OECD countries over the period 1980-2014. The review finds much support for Schumpeterian growth theory, but shows that all studies reviewed have several limitations, including conceptual problems associated with the use of the number/stock of patents as a measure of the flow/stock of knowledge, the possibility of spurious regressions due to non-stationary data, potential mismeasurement of R&D inputs due to possible interpolation and deflation errors, misspecification problems that can arise in difference models when variables are cointegrated, and potential spurious rejections of the unit root hypothesis for R&D intensity when the lag length in unit root tests is too small. The present study avoids these limitations and finds strong evidence in favor of semi-endogenous growth. |
| Keywords: | semi-endogenous growth models, Schumpeterian growth models, R&D, TFP, unit roots, cointegration |
| JEL: | O30 O40 |
| Date: | 2020–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:98022&r=all |
| By: | Marie-Louise Leroux (CORE - Center of Operation Research and Econometrics [Louvain] - UCL - Université Catholique de Louvain, UQAM - Université du Québec à Montréal); Pierre Pestieau (CEPR - Center for Economic Policy Research - CEPR, PSE - Paris School of Economics); Grégory Ponthière (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12, PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We study the design of a fair family policy in an economy where parent- hood is regarded either as desirable or as undesirable, and where there is imperfect fertility control, leading to involuntary childlessness/parenthood. Using an equivalent consumption approach in the consumption-fertility space, we .rst show that the identi.cation of the worst-o¤ individuals is not robust to how the social evaluator .xes the reference fertility level. Adopting the ex post egalitarian social criterion, which gives priority to the worst o¤ in realized terms, we then examine the compensation for involuntary childlessness/parenthood. Unlike real-world family policies, a fair family policy does not always involve positive family allowances to (voluntary) parents, and may also, under some reference fertility lev- els, involve positive childlessness allowances. Our results are robust to assuming asymmetric information and to introducing Assisted Reproduc- tive Technologies. |
| Keywords: | fertility,childlessness,family policy,compensation,fairness |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-02400049&r=all |
| By: | Cozzi, Guido; Galli, Silvia |
| Abstract: | Schumpeterian growth theory based on creative destruction was originally designed for continuous time innovation and growth models. However its recently expanding use in DSGE modelling calls for an easily usable discrete time recast. We here show how to construct a discrete time version of creative destruction fully equivalent to its continuous time counterpart. |
| Keywords: | R&D and Growth; Creative Destruction; Discrete Time; DSGE. |
| JEL: | E3 O3 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:97364&r=all |
| By: | Dagli , Suzette (Asian Development Bank); Ferrarini, Benno (Asian Development Bank) |
| Abstract: | This paper estimates the growth impact of disasters, with a focus on developing Asia and its subregions. It finds that severe disasters slow down annual growth in the Pacific island countries by between 1 and 2 percentage points on average. This should come as no surprise, given these economies’ extreme exposure, structural vulnerability, and small size relative to the footprint of major natural hazards. The growth impact is less clear for other regions and worldwide, mainly because disaster effects tend to be highly localized and get diluted in the context of cross-country regressions with nationwide growth as the unit of analysis. |
| Keywords: | developing Asia; disasters; economic growth; natural hazards |
| JEL: | O47 Q51 Q54 |
| Date: | 2019–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0585&r=all |
| By: | Giovanni Dosi (Laboratory of Economics and Management); Marcelo C. Pereira (Universidade Estadual de Campinas); Andrea Roventini (Observatoire français des conjonctures économiques); Maria Enrica Virgillito (Scuola Superiore Sant'Anna) |
| Abstract: | In this work we develop an agent-based model where hysteresis in major macroeconomic variables (e.g., gross domestic product, productivity, unemployment) emerges out of the decentralized interactions of heterogeneous firms and workers. Building upon the “Schumpeter meeting Keynes” family of models (cf. in particular Dosi et al. (2016b, 2017c)), we specify an endogenous process of accumulation of workers’ skills and a state-dependent process of firms entry. Indeed, hysteresis is ubiquitous. However, this is not due to market imperfections, but rather to the very functioning of decentralized economies characterized by coordination externalities and dynamic increasing returns. So, contrary to the insider–outsider hypothesis (Blanchard and Summers, 1986), the model does not support the findings that rigid industrial relations may foster hysteretic behavior in aggregate unemployment. On the contrary, this contribution provides evidence that during severe downturns, and thus declining aggregate demand, phenomena like decreasing investment and innovation rates, skills deterioration, and declining entry dynamics are better candidates to explain long-run unemployment spells and reduced output growth. In that, more rigid labor markets may well dampen hysteretic dynamics by sustaining aggregate demand, thus making the economy more resilient. |
| Keywords: | Computational techniques; Employment; Institutions |
| JEL: | E24 E02 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/hiaqa97n684boj041a440irqd&r=all |
| By: | Hippolyte d'Albis (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Angela Greulich (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, INED - Institut national d'études démographiques); Grégory Ponthière (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12) |
| Abstract: | During the last century, fertility has exhibited, in industrialized economies, two distinct trends: the cohort total fertility rate follows a decreasing pattern, while the cohort average age at motherhood exhibits a U-shaped pattern. This paper proposes a Unified Growth Theory aimed at rationalizing those two demographic stylized facts. We develop a three-period OLG model with two periods of fertility, and show how a traditional economy, where individuals do not invest in education, and where income rises push towards advancing births, can progressively converge towards a modern economy, where individuals invest in education, and where income rises encourage postponing births. Our findings are illustrated numerically by replicating the dynamics of the quantum and the tempo of births for cohorts 1906-1975 of the Human Fertility Database. |
| Keywords: | regime shift,fertility,childbearing age,births postponement,human capital |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01848098&r=all |
| By: | Max Gillman |
| Abstract: | The paper presents a human capital based theory of the sectoral transformation along the balanced growth path equilibrium. Allowing a small upward trend in the productivity of the human capital sector, combined with di§erential human capital intensity and constant productivity across sectors, output gradually shifts over time from relatively less human capital intensive sectors towards more human capital intensive sectors. Sectors intensive in the factor that is becoming relatively more plentiful find their relative prices falling, their "effective productivities" rising at di§erential rates inversely to their relative price decline, and their relative outputs expanding. Adding more sectors of greater human capital intensity causes labor time to decrease across existing sectors, and by relatively more in the least human capital sectors. literature. |
| Keywords: | human capital intensity; sectoral allocation; labor shares; productivity; technological change; neoclassical; optimal growth model |
| JEL: | E13 J24 O11 O14 O33 O41 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp648&r=all |
| By: | Yeganeh Forouheshfar (Université Paris-Dauphine, IRD - Institut de Recherche pour le Développement, PSL - PSL Research University, LEDa - Laboratoire d'Economie de Dauphine - CNRS - Centre National de la Recherche Scientifique - IRD - Institut de Recherche pour le Développement - Université Paris-Dauphine, DIAL - Développement, institutions et analyses de long terme); Najat El Mekkaoui (Université Paris-Dauphine, IRD - Institut de Recherche pour le Développement, PSL - PSL Research University, LEDa - Laboratoire d'Economie de Dauphine - CNRS - Centre National de la Recherche Scientifique - IRD - Institut de Recherche pour le Développement - Université Paris-Dauphine, DIAL - Développement, institutions et analyses de long terme); Hippolyte d'Albis (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | MENA region is undergoing rapid demographic transition, where 50% of the population is under the age 25 and high youth unemployment rates are argued to be one of the main sources of political instability. Fighting youth ex- clusion from work is one of the main challenges in the region. In this paper we evaluate the economic impact of the demographic transition for selected coun- tries which experience di_erent speeds of transition, namely: Iran, Morocco and Egypt. The impact of demographic shift on the evolution of human capital stock and physical capital stock, has been highlighted by the literature. Since _nan- cial markets play a crucial role to allocate capital and channel the funds to the productive sector, it is hence fundamental to take into account the role of the _nancial markets in the growth process associated with demographic change. We have developed a general equilibrium overlapping generations model with a cost for capital mobilisation as a proxy for _nancial markets' e_ciency. We have found that the demographic shift will be an important driver for growth in the upcoming decades. Furthermore, our results show that a more e_cient _nancial sector leads to better economic performance. Speci_cally, youth are the primary bene_ciaries: an increase in the _nancial sector e_ciency can reduce up to 8 percentage points of the youngest age group unemployment. |
| Keywords: | Financial efficiency,Development,MENA region,Demographic transition |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-02409029&r=all |
| By: | Simplice A. Asongu (Yaoundé/Cameroon); John Kuada (Aalborg University, Denmark) |
| Abstract: | Knowledge has emerged as a fundamental driver of economic growth and development by inter alia improving the effectiveness and efficiency of economic projects and boosting the process of finding new avenues of addressing developmental policy syndromes. Recent evidence suggests that Africa is on the threshold of significant and sustainable economic growth if its human and material resources can be effectively mobilised to support the process (Kuada & Mensah, 2017; Asongu & Tchamyou, 2019). Consequently, the World Bank’s Knowledge Economy Framework aims to explore and support the extent to which current policies in African countries affect the knowledge development process (and thereby competitiveness) on the continent. A knowledge economy is an economy in which economic prosperity largely depends on the accessibility, quality and quantity of information available, instead of the means of production (Asongu, 2017a, 2017b). This themed issue of Contemporary Social Science-‘Building Knowledge Economies in Africa’ - consists of papers that focus on, but are not limited to, the four dimensions of the World Bank’s Knowledge Economy Index. These are: information and communication technology, education, economic incentives and institutional regime, and innovation (Tchamyou, 2017). The themed issue engages with high quality contributions which, taken together, address the drivers towards knowledge-based economies. This introduction provides a context for understanding the importance of building knowledge economies in Africa and summarises the main contributions to the themed issue. The paper ends by advising scholars and policy makers regarding the risks associated with a colonial view of knowledge- notably the importance of proposing knowledge-based policies while avoiding hegemonic paradigms and hierarchical constructs. In summary, the issue consists of a set of theoretically informed, empirically robust, policy-relevant and accessible articles for both specialists and non-specialists. |
| Keywords: | Knowledge economy; Development; Africa |
| JEL: | O10 O30 O38 O55 O57 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:20/002&r=all |
| By: | Hauer, Mathew; Schmertmann, Carl (Florida State University) |
| Abstract: | The primary fertility index for a population, the total fertility rate (TFR), cannot be calculated for many areas and time periods because it requires disaggregation of births by mother’s age. Here we discuss a flexible framework for estimating TFR using inputs as minimal as a population pyramid. We develop five variants, each with increasing complexity and data requirements. To evaluate accuracy we test using more than 2,400 fertility schedules with known TFR values, across a diverse set of data sources -- including the Human Fertility Database, Demographic and Health Surveys, U.S. counties, and nonhuman species. We show that even the simplest and least accurate variant has a median error of only 0.09 births/woman over 2,400 fertility schedules, suggesting accurate TFR estimation over a wide range of demographic conditions. We anticipate that this framework will extend fertility analysis to new subpopulations, time periods, geographies, and even species. To demonstrate the framework's utility in new applications, we produce subnational estimates of African fertility levels, reconstruct historical European TFRs for periods up to 150 years before the collection of detailed birth records, and estimate TFR for the U.S. conditional on race and household income. |
| Date: | 2018–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:2f3v6&r=all |
| By: | Felipe , Jesus (Asian Development Bank); McCombie, John (University of Cambridge) |
| Abstract: | This paper shows that because growth models in the tradition of Solow’s and Romer’s are framed in terms of production functions, they are equally subject to a criticism developed by, among others, Phelps Brown (1957), Simon (1979a), and Samuelson (1979). These authors argued that production function estimations are flawed exercises. The reason is that the series of output, labor, and capital stock used are definitionally related through an accounting identity. Consequently, the identity predetermines the estimates that regressions yield. We show that the identity argument helps demystify two illusions in the literature: (i) finding the Holy Grail: total factor productivity is, by construction, a weighted average of dollars per worker and a pure number (the rate of profit or the rental rate of capital); and (ii) the possibility of testing: if estimated properly, production function regressions will yield: (a) a very high fit, potentially an of unity; and (b) estimated factor elasticities equal to the factor shares, hence they must always add up to 1. We illustrate these points by discussing a series of well-known growth accounting exercises and models directly derived from production functions. They are merely tautologies. We conclude that we know substantially less than we think about growth and that many of the discussions in the growth literature are Kuhnian puzzles that only make sense within the neoclassical growth model paradigm. |
| Keywords: | accounting identity; Cobb–Douglas; dual TFP; growth accounting; primal TFP; production function; Romer; Solow |
| JEL: | E22 E23 E25 O11 O33 O47 |
| Date: | 2019–10–28 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0596&r=all |
| By: | Liu, Chuan; Saam, Marianne |
| Abstract: | To what extent have economies become better off because of the diffusion of information and communication technologies (ICT)? We analyze this question based on a growth accounting approach at the level of final output. This approach traces productivity improvements not within sectors but within value chains. It allows judging in a better way to what extent more or better products have become available to final users, in particular consumers, as a result of the diffusion of ICT. A main result is that more than half of the productivity gains related to ICT capital deepening for manufactured goods are contributed by upstream industries. The major part of this contribution is domestic rather than foreign. Moreover, the high sectoral growth in total factor productivity (TFP) in the ICT sector contributes only moderately to TFP growth in non-ICT value chains via the use of intermediates. |
| Keywords: | ICT,economic growth,productivity,value chains,growth accounting |
| JEL: | E22 F62 O47 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:828&r=all |