nep-gro New Economics Papers
on Economic Growth
Issue of 2020‒08‒31
eight papers chosen by
Marc Klemp
University of Copenhagen

  1. The Origins of the Division of Labor in Pre-Industrial Times By Özak, Ömer; Depetris-Chauvin, Emilio
  2. Tying peasants to their land: The rise and fall of private property rights in historical Vietnam By Hoang-Anh Ho
  3. Productive efficiency, technological change and catch up within Africa By Mensah, Emmanuel B.; Owusu, Solomon; Foster-McGregor, Neil
  4. Technological novelty and productivity growth: a cliometric approach. By Marianna Epicoco; Magali Jaoul-Grammare; Anne Plunket
  5. Political instability and economic growth at different stages of economic development:: historical evidence from Greece By Papaioannou, Sotiris
  6. The Historical Impact of Anthropogenic Climate Change on Global Agricultural Productivity By Ariel Ortiz-Bobea; Toby R. Ault; Carlos M. Carrillo; Robert G. Chambers; David B. Lobell
  7. Exchange rate misalignments, growth, and institutions By Jaromir Baxa; Michal Paulus
  8. Economic Growth and the Environment: A Theoretical Reappraisal By Maxime Menuet; Alexandru Minea; Patrick Villieu; Anastasios Xepapadeas

  1. By: Özak, Ömer (Southern Methodist University); Depetris-Chauvin, Emilio
    Abstract: This research explores the historical roots of the division of labor in pre-modern societies. Exploiting a variety of identification strategies and a novel ethnic level dataset combining geocoded ethnographic, linguistic and genetic data, it shows that higher levels of intra-ethnic diversity were conducive to economic specialization in the pre-modern era. The findings are robust to a host of geographical, institutional, cultural and historical confounders, and suggest that variation in intra-ethnic diversity is a key predictor of the division of labor in pre-modern times.
    Date: 2020–07–06
  2. By: Hoang-Anh Ho
    Abstract: I present a theory to account for the emergence of land rights in a subsistence agricultural economy. An important feature is that, to maximize tax revenue, an authoritarian state must devise land rights to overcome the informational constraint in registering the population for tax collection. It can do so, given the state capacity is sufficiently high, by owning land and assigning cultivation rights (but not sale or transfer rights) to landless peasants to tie them to their land. The theory gives rise to a testable hypothesis, positing that private ownership of land is less prevalent in areas where population density is higher. In the early 19th century, the new Nguyen Dynasty of historical Vietnam carried out a land registry to establish formal land rights in the whole country. Exploiting this land registry, I discover that private ownership of land is less prevalent in areas where population density is higher. Furthermore, primary accounts and related historical studies show that the mechanism at work is in line with the proposed theory. Thus, the theory in question and the associated empirical evidence show that a strong state could reverse the general process in economic history whereby societies moved towards private land rights as population density increased and land became more scarce.
    Keywords: Land rights,Population density,Historical Vietnam
    JEL: D02 Q15 N45
    Date: 2020
  3. By: Mensah, Emmanuel B. (Maastricht University, UNU-MERIT); Owusu, Solomon (Maastricht University, UNU-MERIT); Foster-McGregor, Neil (Maastricht University, UNU-MERIT)
    Abstract: The peculiar nature of African development presents unique technological challenges. This often requires African-induced innovation or a combination of frontier and local technologies to solve problems unique to Africa. However, most researchers study technological change in Africa in relation to some globally defined technology frontier. The diffusion of knowledge from this global frontier to other regions however decreases in intensity with geographic and relational distance. Given that African countries are geographically and relationally close to each other, this paper makes a departure from this existing literature and studies technological change and technological catch up within African by considering catch-up with respect to an African technology leader. We do this by using structural methods (Shift and Share catch-up decomposition) and nonparametric methods (Data Envelopment Analysis) to estimate an African production frontier. We further measure productivity change in sub-Saharan Africa and disentangle the change due to general technological progress and efficiency change using the Malmquist Productivity Index (MPI). Our results show that Botswana and Mauritius are the only two countries in Africa which have converged to the productivity level as well as the efficiency level of the frontier. This successful convergence is driven more by efficiency catch-up and less by technological change. We explore the special role of efficiency catch-up by decomposing it into within-sector convergence, between -sector convergence and initial specialization. The results highlight the special role of structural change in catch-up. This paper contributes to recent evidence suggesting that countries can climb up the income ladder at a faster rate through a two-pronged transformation – i.e. structural change and technological catch-up.
    Keywords: Africa, Technological change, Technological Catch-up, Economic Growth
    JEL: O30 O47 N17
    Date: 2020–08–04
  4. By: Marianna Epicoco; Magali Jaoul-Grammare; Anne Plunket
    Abstract: This paper aims at providing further empirical evidence on the long-run relationship between technology and productivity by using a cliometric approach based on Granger’s causality. We test, for the first time, the sign and direction of causality between technological novelty, which is an important driver of radical technological innovations, and productivity, for the whole 20th century. Technological novelty is here proxied by the degree of component recombination of inventions. We find that both the flow and stock of Technologically Novel Inventions (TNI) have an important, but temporary, positive impact on productivity, and that these inventions are originated by a handful of leading technological fields, mainly concentrated in the sectors of specialized suppliers of capital equipment and in science based sectors. Our results also show that, at the aggregate level, there is no causal relationship running from productivity to TNI, which suggests that radical technologies are exogenous, i.e., independent of productivity variations. However, we also find that, at technological field level, productivity has a positive or negative impact on TNI, depending on the field. This instead suggests that some radical technologies are endogenous. We conclude by discussing implications of these results on the productivity stagnation since the 1970s and the current productivity slowdown.
    Keywords: Technological novelty; Radical technologies; Productivity; Component recombination; Cliometrics; Granger’s causality.
    JEL: O33 O40 C32 N12
    Date: 2020
  5. By: Papaioannou, Sotiris
    Abstract: This study explores the relationship between political instability and growth within the perspective of Greece’s modern history. The narrative approach is used to identify major events of political unrest which took place in the period from 1833 onwards. Econometric estimates show that political instability exerts an adverse effect on economic growth. Likewise, poor economic performance increases the likelihood of political risk. Their relationship is not uniform across time but strengthens only after the second half of the 20th century. The impact of political instability is conditional on the stage of economic development with the most harmful effect observed in the phase of rapid industrialization. When distinguishing between permanent and temporary effects of political instability, a strongly negative effect is observed on the growth rate of potential output and a weakly negative impact on the cyclical component of GDP. Political instability is unfavorably affected by the growth rate of potential output.
    Keywords: political instability; economic growth; Greece
    JEL: N10 O47
    Date: 2020–08
  6. By: Ariel Ortiz-Bobea; Toby R. Ault; Carlos M. Carrillo; Robert G. Chambers; David B. Lobell
    Abstract: Agricultural research has fostered productivity growth, but the historical influence of anthropogenic climate change on that growth has not been quantified. We develop a robust econometric model of weather effects on global agricultural total factor productivity (TFP) and combine this model with counterfactual climate scenarios to evaluate impacts of past climate trends on TFP. Our baseline model indicates that anthropogenic climate change has reduced global agricultural TFP by about 21% since 1961, a slowdown that is equivalent to losing the last 9 years of productivity growth. The effect is substantially more severe (a reduction of ~30-33%) in warmer regions such as Africa and Latin America and the Caribbean. We also find that global agriculture has grown more vulnerable to ongoing climate change.
    Date: 2020–07
  7. By: Jaromir Baxa (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic & Information Theory and Automation, Czech Academy of Sciences, Prague, Czech Republic); Michal Paulus (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)
    Abstract: In this paper, we revisit the relationship between economic growth and exchange rate misalignments, especially undervaluations. In particular, we ask which countries benefit from undervaluations at most, and whether the impact of undervaluations on growth depends on institutional quality as suggested in previous literature. First, we separate countries into groups according to their institutional quality using the cluster analysis. Then, we estimate the relationship between growth and exchange rate misalignment while allowing for variation in coefficients across these clusters. Our results confirm the positive relationship between undervaluation and growth, and this relationship is the highest for countries with the highest quality of institutions rather than with a poor level of institutional quality. Therefore, our results reconcile the importance of good institutions and do not support the hopes that the countries can compensate for the poor institutional quality via undervaluation of currencies successfully.
    Keywords: exchange rate misalignments, undervaluation, economic growth, institutions, corruption
    JEL: F43 F31
    Date: 2020–08
  8. By: Maxime Menuet; Alexandru Minea; Patrick Villieu; Anastasios Xepapadeas
    Abstract: The relationship between economic growth and the environment is at the core of the theoretical and empirical researches since at least thirty years. This paper shows that a small-dimension ecological growth model can lead to a great diversity of relationships between pollution and growth, including the popular environmental Kuznets curve (EKC) and logistic curve (ELC). We exhibit multiple equilibria and complex local and global dynamics resulting in potential indeterminacy or long-lasting pollution cycles. Furthermore, our model reveals an ecological poverty trap associated with a possible irreversibility of the environmental degradation. Interestingly, our findings do not resort on some exogenous technological breaks but result from the endogenous interaction between households� saving behaviour and the natural resources' law of motion.
    Keywords: Growth, Environment, Bifurcation, Endogenous Cycles, Poverty Traps, Pollution
    JEL: E32 O44 Q50
    Date: 2020–08–27

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