nep-gro New Economics Papers
on Economic Growth
Issue of 2020‒05‒25
eight papers chosen by
Marc Klemp
University of Copenhagen

  1. Statehood experience and income inequality: A historical perspective By Vu, Trung V.
  2. Immigration, Innovation, and Growth By Konrad B. Burchardi; Thomas Chaney; Tarek Alexander Hassan; Lisa Tarquinio; Stephen J. Terry
  3. Culture and Market: A Macroeconomic Tale of Two Institutions By Mausumi Das; Priyanka Arora
  4. Slow Real Wage Growth during the Industrial Revolution: Productivity Paradox or Pro-Rich Growth? By Crafts, Nicholas
  5. On Investment and Cycles in Explicitely Solved Vintage Capital Models By Hippolyte d'Albis; Jean-Pierre Drugeon
  6. Gender issues in Kaleckian distribution and growth models: On the macroeconomics of the gender wage gap By Hein, Eckhard
  7. The love for children hypothesis and the multiplicity of fertility rates By Paolo Melindi-Ghidi; Thomas Seegmuller
  8. Antiquity and capitalism: The finance-growth perspective By Dombi, Akos; Grigoriadis, Theocharis; Zhu, Junbing

  1. By: Vu, Trung V.
    Abstract: Does state history matter for contemporary income distribution? Employing data for up to 153 countries, this paper examines the extent to which accumulated statehood experience, obtained over six millennia, affects the current level of income inequality. To capture the historical depth of experience with state-level institutions, I use an extended measure of state history, constructed from 3500BCE to 2000CE. The results indicate that the relationship between state history and income inequality exhibits a U-shaped pattern. Specifically, statehood experience up to a point helps reduce income inequality. Nevertheless, an excessive duration of state history is conducive to more unequal income distribution. These findings are largely robust to performing a battery of sensitivity tests.
    Keywords: state history, income inequality, deep determinants, comparative development.
    JEL: N00 O11 O15 O43
    Date: 2020–05
  2. By: Konrad B. Burchardi; Thomas Chaney; Tarek Alexander Hassan; Lisa Tarquinio; Stephen J. Terry
    Abstract: We show a causal impact of immigration on innovation and dynamism in US counties. To identify the causal impact of immigration, we use 130 years of detailed data on migrations from foreign countries to US counties to isolate quasi-random variation in the ancestry composition of US counties that results purely from the interaction of two historical forces: (i) changes over time in the relative attractiveness of different destinations within the US to the average migrant arriving at the time and (ii) the staggered timing of the arrival of migrants from different origin countries. We then use this plausibly exogenous variation in ancestry composition to predict the total number of migrants flowing into each US county in recent decades. We show four main results. First, immigration has a positive impact on innovation, measured by the patenting of local firms. Second, immigration has a positive impact on measures of local economic dynamism. Third, the positive impact of immigration on innovation percolates over space, but spatial spillovers quickly die out with distance. Fourth, the impact of immigration on innovation is stronger for more educated migrants.
    JEL: J61 O31 O40
    Date: 2020–05
  3. By: Mausumi Das (Department of Economics, Delhi School of Economics); Priyanka Arora (Delhi School of Economics)
    Abstract: In this paper we model endogenous evolution of cultural traits which is mediated through market, and examine its impact on long run economic growth. Historically culture has played an important role in the process of economic development. Yet, economic development itself impacts upon the pre-existing cultural values and beliefs. We interact culture with market and show that such interaction may generate multiple growth trajectories depending on the initial distribution of cultural traits in the economy. In particular, an economy may end up in a culture-induced low growth trap in the long run. We also show that over time, with economic development, culture takes a back seat but its initial influence continues to impact long run outcomes.
    JEL: Z13 O11 D90
    Date: 2020–04
  4. By: Crafts, Nicholas (University of Warwick & University of Sussex)
    Abstract: I examine the implications of technological change for productivity, real wages and factor shares during the industrial revolution using recently available data. This shows that real GDP per worker grew faster than real consumption earnings but labour’s share of national income changed little as real product wages grew at a similar rate to labour productivity in the medium term. The period saw modest TFP growth which limited the growth both of real wages and of labour productivity. Economists looking for an historical example of rapid labour-saving technological progress having a seriously adverse impact on labour’s share must look elsewhere.
    Keywords: Engels’ pause ; factor shares ; industrial revolution ; labour productivity ; real wages JEL codes: N13 ; O33 ; O47
    Date: 2020
  5. By: Hippolyte d'Albis (PSE - Paris School of Economics); Jean-Pierre Drugeon (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: The purpose of this contribution is to consider a discrete time formulation that would allow for clarifying some salient features of a vintage based understanding of the capital stock..ree main lines of conclusions are established on an analytical basis. First and for an elementary conguration with linear utility, it is proved that the rate of growth of investment is prone to andoscillating—convergent, sustained or unstable—motions. Second and for an environment with a linear production technology and a AK setup, the dynamics of investment is explicitly solved and it is established that the rate of growth of investment may either converge to the steady growth solution in oscillating way, diverge from that solution in a oscillating way, or even undergo permanent sustained oscillations with a periodicity of two. .ird, it is proved that no perennial .uctuations can emerge within a benchmark environment with strictly concave utilities and production technologies. On a methodological basis, few restrictions are superimposed, the arguments remain fairly general and the proofs are elementary.
    Keywords: Vintage Capital,Optimal Growth,Discrete Time
    Date: 2020–05
  6. By: Hein, Eckhard
    Abstract: We introduce a gender wage gap into basic one-good textbook versions of the neo-Kaleckian distribution and growth model and examine the effects of improving gender wage equality on income distribution, aggregate demand, capital accumulation and productivity growth. For the closed economy model, reducing the gender wage gap has no effect on the profit share, and a gender equality-led regime requires the propensity to save out of female wages to fall short of the propensity to save out of male wages. For the open economy model this condition is modified by the effects of improved gender wage equality on exports and - through changes of the profit share - on domestic demand. Finally for the open economy with productivity growth we find an unambiguously expansionary effect of narrowing the gender wage gap on long-run equilibrium capital accumulation and productivity growth if the demand growth regime is gender equality-led. A gender equality-burdened demand growth regime, however, may generate different long-run effects of improving gender wage equality on capital accumulation and productivity growth: expansionary, intermediate or contractionary.
    Keywords: gender wage gap,distribution,growth,Kaleckian model
    JEL: E11 E21 E22 O40 O41
    Date: 2020
  7. By: Paolo Melindi-Ghidi (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Thomas Seegmuller (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)
    Abstract: As illustrated by some French departments, how can we explain the existence of equilibria with different fertility and growth rates in economies with the same fundamentals , preferences, technologies and initial conditions? To answer this question we develop an endogenous growth model with altruism and love for children. We show that independently from the type of altruism, a multiplicity of equilibria might emerge if the degree of love for children is high enough. We refer to this condition as the love for children hypothesis. Then, the fertility rate is determined by expectations on the future growth rate and the dynamics are not path-dependent. Our model is able to reproduce different fertility behaviours in a context of completed demographic transition independently from fundamentals, preferences, technologies and initial conditions.
    Keywords: Fertility,Love for Children,Expectations,Endogenous Growth,Bal- anced Growth Path
    Date: 2019–08
  8. By: Dombi, Akos; Grigoriadis, Theocharis; Zhu, Junbing
    Abstract: This paper explores the impact of antiquity on capitalism through the finance-growth nexus. We define antiquity as the length of established statehood (i.e., state history) and agricultural years. We argue that extractive institutions and deeply entrenched interest groups may prevail in societies with ancient roots. The paper offers an in-depth analysis of one particular channel through which extractive institutions may impair economic growth: the finance-growth channel. We propose that in countries with ancient statehood, the financial sector might be captured by powerful economic and political elites leading to a distorted finance-growth relationship. We build a model in which the equilibrium relationship between companies and banks depends on the entrenchment of the economic elites and the length of established statehood. To validate our argument empirically, we run panel-threshold regressions on a global sample between 1970 and 2014. The regression results are supportive and show that financial development - measured by the outstanding amount of credit - is negative for growth in states with ancient institutional origins, while it is positive in relatively younger ones.
    Keywords: antiquity,finance-growth nexus,interest groups,rent-seeking
    JEL: C70 N20 O16 O17 O47
    Date: 2020

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