nep-gro New Economics Papers
on Economic Growth
Issue of 2020‒04‒06
nine papers chosen by
Marc Klemp
University of Copenhagen

  1. Ethnic Groups' Access to State Power and Group Size By Hector Galindo-Silva
  2. Automation, stagnation, and the implications of a robot tax By Gasteiger, Emanuel; Prettner, Klaus
  3. A Spatiotemporal Framework for the Analytical Study of Optimal Growth Under Transboundary Pollution By Raouf Boucekkine; Giorgio Fabbri; Salvatore Federico; Fausto Gozzi
  4. A Freeway to Prosperity? Evidence from Calabria, South of Italy By Emanuele Ciani; Guido de Blasio; Samuele Poy
  5. Measuring the creation and adoption of new technologies using trade and patent data By Foster-McGregor, Neil; Nomaler, Onder; Verspagen, Bart
  6. Implications of Quality of Schooling on Economic Growth and Convergence– A System Dynamics Perspective By Meeta Keswani Mehra; Swati Saini
  7. Economic Inequality in Preindustrial Germany, ca. 1300 – 1850 By , Stone Center; Alfani, Guido; Gierok, Victoria; Schaff, Felix
  8. The Long Run Evolution of Absolute Intergenerational Mobility By , Stone Center; Berman, Yonatan
  9. The tangled historical roots of entrepreneurial growth aspirations By Estrin, Saul; Decker, Stephanie; Mickiewicz, Tomasz

  1. By: Hector Galindo-Silva
    Abstract: Many countries are ethnically diverse. However, despite the benefits of ethnic heterogeneity, ethnic-based political inequality and discrimination are pervasive. Why is this? This study suggests that part of the variation in ethnic-based political inequality depends on the relative size of ethnic groups within each country. Using group-level data for 569 ethnic groups in 175 countries from 1946 to 2017, I find evidence of an inverted-U-shaped relationship between an ethnic group's relative size and its access to power. This single-peaked relationship is robust to many alternative specifications, and a battery of robustness checks suggests that relative size influences access to power. Through a very simple model, I propose an explanation based on an initial high level of political inequality, and on the incentives that more powerful groups have to continue limiting other groups' access to power. This explanation incorporates essential elements of several existing theories on the relationship between group size and discrimination, and suggests a new empirical prediction: the single-peaked pattern should be weaker in countries where political institutions have historically been less open. This additional prediction is supported by the data.
    Date: 2020–03
  2. By: Gasteiger, Emanuel; Prettner, Klaus
    Abstract: We assess the long-run growth effects of automation in the overlapping generations framework. Although automation implies constant returns to capital and, thus, an AK production side of the economy, positive long-run growth does not emerge. The reason is that automation suppresses wage income, which is the only source of investment in the overlapping generations model. Our result stands in sharp contrast to the representative agent setting with automation, where sustained long-run growth is possible even without technological progress. Our analysis therefore provides a cautionary tale that the underlying modeling structure of saving/investment decisions matters for the derived economic impact of automation. In addition, we show that a robot tax has the potential to raise per capita output and welfare at the steady state. However, it cannot induce a takeoff toward positive long-run growth.
    Keywords: Automation,robot taxes,stagnation,economic growth,fiscal policy
    JEL: O33 O41 E60
    Date: 2020
  3. By: Raouf Boucekkine; Giorgio Fabbri; Salvatore Federico; Fausto Gozzi
    Abstract: We construct a spatiotemporal frame for the study of optimal growth under transboundary pollution. Space is continuous and polluting emissions originate in the intensity of use of the production input. Pollution ows across locations following a diffusion process. The objective functional of the economy is to set the optimal production policy over time and space to maximize welfare from consumption, taking into account a negative local pollution externality and the diffusive nature of pollution. Our framework allows for space and time dependent preferences and productivity, and does not restrict diffusion speed to be spaceindependent. This provides a comprehensive setting to analyze pollution diffusion with a close account of geographic heterogeneity. The involved optimization problem is infinite-dimensional. We propose an alternative method for an analytical characterization of the optimal paths and the asymptotic spatial distributions. The method builds on a deep economic concept of pollution spatiotemporal welfare effect, which makes it denitely useful for economic analysis
    Keywords: Optimal growth, spatiotemporal modelling, transboundary pollution,infinite dimensional optimal control
    JEL: Q53 R11 C61 R12 O41
    Date: 2019–10
  4. By: Emanuele Ciani; Guido de Blasio; Samuele Poy
    Abstract: This paper investigates the impact of the freeway “Salerno-Reggio Calabria” on long-term local economic development. Built between 1962 and 1974, the freeway connected the southernmost region of the Italian peninsula (Calabria) to the national highway network. According to the original plan, the freeway could have been built along three different routes. The final choice was mostly influenced by powerful politicians who lobbied in favor of the path crossing their constituency (the town of Cosenza). In a dif-in-dif framework, we compare the growth of “inconsequentially” treated municipalities – traversed only because they lie on the route connecting Cosenza – with the one of municipalities on the two discarded paths. Our results suggest that the freeway caused a significant reorganization of both economic activity and population from untreated to treated locations. At the same time, the infrastructure does not seem to have helped the convergence of the overall region
    Keywords: highways, transport infrastructure, local development
    JEL: H54 R12 R42
    Date: 2020–02
  5. By: Foster-McGregor, Neil (UNU-MERIT); Nomaler, Onder (UNU-MERIT); Verspagen, Bart (UNU-MERIT, and SBE, Maastricht University)
    Abstract: Emerging technologies are thought to be shaping the new industrial landscape, potentially creating opportunities for developing countries to industrialise through increased productivity, but also the risk that they may be excluded from the benefits of these technologies through reshoring and by eroding the competitive advantage of developing countries. In this paper we look to identify trade (i.e. imports and exports) and inventions (patents) in 4IR technologies, as a means of identifying the development, production and use of such technologies globally. The paper provides information on those countries which are leading the technology race, those which are not leading but still following, and those which are being left behind. To achieve this, the paper uses detailed patent data to identify the technology leaders in the fourth industrial revolution, and trade data to identify the producers and users of these technologies. The paper subsequently relates the use of these technologies to indicators of the level of industrial development.
    Keywords: Technological Change, Emerging Technologies, Fourth Industrial Revolution, Industrialisation, Patents, Imports, Exports
    JEL: O14 O33
    Date: 2019–12–31
  6. By: Meeta Keswani Mehra (Jawaharlal Nehru University); Swati Saini (Jawaharlal Nehru University)
    Abstract: This paper formulates a growth model to study the interlinkages among quality of schooling, human capital and technical progress of a stylized developing economy such as India. The simulation results reveal that under the technology regimes of innovation and imitation, the quality of schooling triggers a child quantity-quality trade-off wherein parents invest in educating their children and bear lesser number of children when schooling quality exceeds an endogenously determined threshold. Consequently, the stylized economy reaches a self-sustaining growth path under both the regimes by investing in human capital of the young generation in the long-run.
  7. By: , Stone Center (The Graduate Center/CUNY); Alfani, Guido; Gierok, Victoria; Schaff, Felix
    Abstract: This article provides an overview of economic inequality in Germany from the fourteenth to the nineteenth century. It builds upon data produced by the German Historical School, which from the late nineteenth century pioneered inequality studies, and adds new archival information for selected areas. Inequality tended to grow during the early modern period, with an exception: the Thirty Years’ War (1618-48), together with the 1627-29 plague, seem to have caused a temporary but significant phase of inequality reduction. This is in contrast to other European areas, from Italy to the Low Countries, where during 1500-1800 inequality growth was monotonic. Some evidence of a drop in inequality is also found after the Black Death of 1348-49. Our findings contribute to deepen and nuance our knowledge of long-term inequality trends in preindustrial Europe, and offer new material to current debates on the determinants of inequality change in western societies, past and present. (Stone Center on Socio-Economic Inequality Working Paper)
    Date: 2020–03–09
  8. By: , Stone Center (The Graduate Center/CUNY); Berman, Yonatan
    Abstract: This paper combines cross-sectional and longitudinal income data to present the evolution of absolute intergenerational income mobility in ten developed economies in the 20th century. Absolute mobility decreased during the second half of the 20th century in all these countries. Increasing income inequality and decreasing growth rates have contributed to the decrease. Yet, growth is the dominant contributor in most countries. We show that detailed panel data are unnecessary for estimating absolute mobility over the long run. (Stone Center on Socio-Economic Inequality Working Paper)
    Date: 2020–03–09
  9. By: Estrin, Saul; Decker, Stephanie; Mickiewicz, Tomasz
    Abstract: Research Summary: We consider what configurations of historical and geographic dimensions influence entrepreneurial growth aspirations (EGA). Our theoretical framework combines geography (coastal location, resource dependence), long-term colonial history (ethnic heterogeneity, legal origins), and postcolonial history (low levels of conflict and population displacement; not having “bad neighbors”). We employ abductive reasoning to link the social science and historical literatures via analytically structured histories of Ghana, Nigeria, and Angola. Next, we undertake a fuzzy set qualitative comparative analysis on sub-Saharan Africa countries to investigate which particular configurations of these dimensions are important for EGA. We demonstrate the importance of configurations over individual variables and add context-bound dimensions to the study of entrepreneurship in developing countries, through historical analysis. Managerial Summary: Our analysis may offer entrepreneurs a template for identifying potential opportunities and threats in order to calibrate their strategies for scaling up their venture in sub-Saharan Africa. We argue that environments rich in entrepreneurial growth opportunities are associated with configurations where negative aspects are more than compensated by positive ones. For Botswana, the low levels of internal conflict compensate for unfavorable location. For Angola, the positive impact of coastal location and relatively low ethnic heterogeneity counterbalance the negative effect of resource rents. Resource-driven economies are more entrepreneurial: better economic opportunities can sometimes result from having extractive industries. For African entrepreneurs it is not only relevant what happens in their own countries, as their opportunities are directly affected by economic or political turmoil in neighboring countries.
    Keywords: Africa; entrepreneurship; global enterprise monitor; history; qualitative comparative analysis
    JEL: J50
    Date: 2020–02–19

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