nep-gro New Economics Papers
on Economic Growth
Issue of 2020‒04‒27
eleven papers chosen by
Marc Klemp
University of Copenhagen

  1. Ancestral Norms, Legal Origins, and Female Empowerment By Brodeur, Abel; Mabeu, Marie Christelle; Pongou, Roland
  2. 'Getting to Denmark': The Role of Elites for Development By Boberg-Fazlic, Nina; Jensen, Peter Sandholt; Lampe, Markus; Sharp, Paul; Skovsgaard, Christian Volmar
  3. Patient democracies? By Daniel Horn; Hubert Kiss Janos; Sára Khayouti
  4. Urban population in Germany, 1500 - 1850 By Ulrich Pfister
  5. A strictly economic explanation of gender norms: The lasting legacy of the plough By Alessandro Cigno
  6. Survival of the Confucians: social status and fertility in China, 1400-1900 By Hu, Sijie
  7. Human Capital as Engine of Growth the Role of Knowledge Transfers in Promoting Balanced Growth within and across Countries By Ehrlich, Isaac; Pei, Yun
  8. Government Consumption, Government Debt and Economic Growth By Shahrzad Ghourchian; Hakan Yilmazkuday
  9. Differential Fertility, Intergenerational Mobility and the Process of Economic Development By Aso, Hiroki
  10. Estimation of a long run regime for growth and demand through different filtering methods By Joana David Avritzer
  11. Endogenous lifetime, intergenerational mobility and economic development By Aso, Hiroki

  1. By: Brodeur, Abel (University of Ottawa); Mabeu, Marie Christelle (University of Ottawa); Pongou, Roland (University of Ottawa)
    Abstract: A large literature documents persistent impacts of formal historical institutions. However, very little is known about how these institutions interact with ancestral traditions to determine long-term economic and social outcomes. This paper addresses this question by studying the persistent effect of legal origins on female economic empowerment in sub-Saharan Africa, and how ancestral cultural norms of gender roles may attenuate or exacerbate this effect. Taking advantage of the arbitrary division of ancestral ethnic homelands across countries with different legal origins, we directly compare women among the same ethnic group living in civil law countries and common law countries. We find that, on average, women in common law countries are signicantly more educated, are more likely to work in the professional sector, and are less likely to marry at young age. However, these effects are either absent or significantly lower in settings where ancestral cultural norms do not promote women’s rights and empowerment. In particular, we find little effect in bride price societies, patrilocal societies, and societies where women were not involved in agriculture in the past. Our findings imply that to be optimal, the design of formal institutions should account for ancestral traditions.
    Keywords: legal origins, ancestral norms, women's empowerment, gender roles
    JEL: D03 I25 J16 N37
    Date: 2020–03
  2. By: Boberg-Fazlic, Nina (Department of Business and Economics); Jensen, Peter Sandholt (Department of Business and Economics); Lampe, Markus (Vienna University of Economics and Business, CEPR); Sharp, Paul (Department of Business and Economics); Skovsgaard, Christian Volmar (Department of Public Health - Health Economy)
    Abstract: We explore the role of elites for development and in particular for the spread of cooperative creameries in Denmark in the 1880s, which was a major factor behind that country’s rapid economic catch-up. We demonstrate empirically that the location of early proto-modern dairies, so-called hollænderier, introduced onto traditional landed estates by landowning elites from the Duchies of Schleswig and Holstein in the eighteenth century, can explain the location of cooperative creameries in 1890, more than a century later. We interpret this as evidence that areas close to estates which adopted the Holstein System witnessed a gradual spread of modern ideas from the estates to the peasantry. Moreover, we identify a causal relationship by utilizing the nature of the spread of the Holstein System around Denmark, and the distance to the first estate to introduce it, Sofiendal. Finally, we demonstrate that areas with cooperatives also enjoyed higher levels of income.
    Keywords: Institutions; technology; knowledge spillovers; landowning elites; cooperatives; Denmark
    JEL: N53 O13 Q13
    Date: 2020–04–17
  3. By: Daniel Horn (Centre for Economic and Regional Studies and Corvinus University of Budapest); Hubert Kiss Janos (Centre for Economic and Regional Studies and Corvinus University of Budapest); Sára Khayouti (University of Amsterdam, Roetersstraat 11, 1018 WB Amsterdam, The Netherlands)
    Abstract: We test if the political regime of a country associates with the patience of the citizens. Recent findings indicate that i) more democratic countries tend to have higher growth, and ii) patience correlates positively with economic development, suggesting a potential link between the political regime and patience. We document a positive association between the level of democracy and patience for most of the political regime indices that we use, even after controlling for region, economic development, geographical conditions, and culture. We report some evidence that political participation is behind our findings.
    Keywords: democracy, patience, political regime, time preferences
    JEL: D02 D12
    Date: 2020–02
  4. By: Ulrich Pfister
    Abstract: In situations where few data are available to document economic activity, the size of the urban population is a valuable indicator for economic development and the spatial pattern of an economy. This study improves the basis for investigations into the quantitative urban history of Germany by constructing a novel database of the population size of 412 cities that had at least 5000 inhabitants between 1500 and 1850. Compared with earlier databases it uses a considerably larger body of sources, and it improves the resolution of data by interpolating and extrapolating annual series. The resulting series of total urban population is consistent with recent work on aggregate demographic trends in Germany. The trajectory of the urbanization rate shows that Germany began its transition from stagnation to growth around 1800, several decades before the onset of industrialization. Regional urbanization rates converged (rather than diverged) in 1815/19–1858, that is, during the transition to the first stage of industrialization. Discussion of individual regional histories suggests state formation, (proto-)industrialization and regional population density as possibly relevant determinants of urban growth in the area and time period studied.
    Keywords: Urban growth, economic development, economic demography
    JEL: N13 N33 N93 O47
    Date: 2020–04
  5. By: Alessandro Cigno
    Abstract: We show that the descendants of primeval plough users have an interest in maintaining the gender division of labour which was originally justi.ed on comparative-advantage grounds, even though in a modern economy individual productivity depends on education rather than physical characteristics. The result rests on the argument that the contract enforcement technology developed in response to the availability of the plough serves a purpose also in a modern economy because of a possible hold-up problem in the implementation of a Nash-bargaining equilibrium with domestic division of labour.
    Keywords: Plough, comparative advantage, matching, hold-up problem, migration.
    Date: 2020
  6. By: Hu, Sijie
    Abstract: This paper uses the genealogical records of 35,691 men to test one of the fundamental assumptions of the Malthusian model. Did higher living standards result in increased net reproduction? An empirical investigation of China between 1400 and 1900 finds a positive relationship between social status and fertility. The gentry scholars, the Confucians, produced three times as many sons as the commoners, and this status effect on fertility was stronger in the post-1600 period than in the pre-1600 period. The effect disappears once I control for the number of marriages. Increased marriages among upper-class males drove reproductive success in Imperial China. The results add a demographic perspective to explain the lack of modern economic growth in Imperial China.
    Keywords: fertility; social status; marriages; reproductive success; Malthusian mechanism; China
    JEL: J13 J12 N35
    Date: 2020–04–01
  7. By: Ehrlich, Isaac (University at Buffalo, SUNY); Pei, Yun (University at Buffalo, SUNY)
    Abstract: Unlike physical capital, human capital has both embodied and disembodied dimensions. It can be perceived of as skill and acquired knowledge, but also as knowledge spillover effects between overlapping generations and across different skill groups within and across countries. We illustrate the roles these characteristics play in the process of economic development; the relation between income growth and income and fertility distributions; and the relevance of human capital in determining the skill distribution of immigrants in a balanced-growth global equilibrium setting. In all three illustrations, knowledge spillover effects play a key role. The analysis offers new insights for understanding the decline in fertility below population replacement rate in many developed countries; the evolution of income and fertility distributions across developing and developed countries; and the often asymmetric effects that endogenous immigration flows and their skill composition exert on the long-term net benefits from immigration to natives in source and destination countries.
    Keywords: human capital, economic growth, demographic change, endogenous immigration, income distribution
    JEL: F22 F43 J11 J24 O15
    Date: 2020–04
  8. By: Shahrzad Ghourchian (Oklahoma City University); Hakan Yilmazkuday (Department of Economics, Florida International University)
    Abstract: This paper compares the effects of government consumption and government debt on economic growth by using data from 83 countries, including both developed and developing markets, over the period between 1960 and 2014. Linear regressions reveal that the negative effects of government consumption are relatively higher than the negative effects of government debt. A nonlinear investigation further suggests that the restrictions on government expenditure to prevent negative growth are shown to be more important for countries with lower trade openness, lower inflation, or higher financial depth, whereas the restrictions on government debt are shown to be more important for countries with higher trade openness, lower inflation or higher financial depth.
    Keywords: Government Consumption, Government Debt, Economic Growth, Thresholds, Cross-Country Analysis
    JEL: H50 H63 O23 O47
    Date: 2020–02
  9. By: Aso, Hiroki
    Abstract: This paper analyzes the effects of population dynamics with differential fertility between the educated and the uneducated on intergenerational mobility, income inequality and economic development in an overlapping generations framework. Population dynamics has two effects on the economy: the direct effect on the educated share through changing in population size of the economy as whole, and the indirect effect on the educated share through decreasing/increasing transfer per child. When population growth increases sufficiently, the mobility and income inequality exhibit cyclical behavior due to rapidly decreasing transfer per child and population size. In contrast, when population growth decreases sufficiently, the mobility and income inequality monotonically approach steady state and the economy has low steady state with high population growth and income inequality, and high steady state with low population growth and income inequality. As a result, population dynamics with economic development plays crucial role in the transitional dynamics of mobility.
    Keywords: Differential the fertility, Intergenerational mobility, Economic development, Income inequality
    JEL: I24 I25 J13 J62
    Date: 2020–03–23
  10. By: Joana David Avritzer (Department of Economics, New School for Social Research)
    Abstract: This paper discusses the possibility of estimating a long run relationship between income distribution and growth. As emphasized by Blecker (2016), the neo-Kaleckian empirical literature has focused on the estimation of a short run relationship. This paper contributes to the debate by looking at a long term relationship through the use of filtering methods. We first estimate the long run component (or "trend" component) of the relevant variables using various types of filters. Second, we run causality tests and frequentist OLS estimations to test for the relationship between the estimated trend components. We find that there is little difference between the results of each filter and there is a significant long run relationship between capacity utilization and, therefore, aggregate demand, and income distribution. This relationship is shown, furthermore, to be positive, in other words, the higher the wage share, the higher is aggregate demand in the long run.
    Keywords: Functional income distribution, economic growth, filtering methods
    JEL: E11 E12 C10
    Date: 2020–04
  11. By: Aso, Hiroki
    Abstract: This paper analyzes the effects of endogenous lifetime on the relationship between intergenerational mobility and economic development in an overlapping generations framework. We assume that an individual’s lifetime depends on health status, which improves with economic development. Increase in lifetime encourages incentives of education investment while decreasing transfer, which is the funding source for education. The dynamics of intergenerational mobility and income inequality depend crucially on lifetime. If an increase in lifetime with economic development is sufficiently small, the mobility monotonically increases while income inequality decreases. However, if lifetime increases rapidly with economic development, the mobility and income inequality exhibit cyclical, and even chaotic behavior. In fact, these various patterns of intergenerational mobility have been observed in developed countries.
    Keywords: Endogenous lifetime, Intergenerational mobility, Economic development, Income inequality
    JEL: I15 I24 J62
    Date: 2020–03–25

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