nep-gro New Economics Papers
on Economic Growth
Issue of 2021‒01‒11
seven papers chosen by
Marc Klemp
University of Copenhagen

  1. Corruption and the Cultural Evolution of Family Ties By Anastasia Latina; Dimitrios Varvarigos
  2. Slavery and development in nineteenth century Brazil By Palma, Nuno; Papadia, Andrea; Pereira, Thales; Weller, Leonardo
  3. Money, Human Capital and Endogenous Market Structure in a Schumpeterian Economy By He, Qichun; Wang, Xilin
  4. On the long-run fluctuations of inheritance in two-sector OLG models By Florian Pelgrin; Alain Venditti
  5. China's Great Boom as a Historical Process By Brandt, Loren; Rawski, Thomas G.
  6. The Legacy of the Missing Men: The Long-Run Impact of World War I on Female Labor Force Participation By Gay, Victor
  7. Protectionism and Economic Growth: Causal Evidence from the First Era of Globalization By Niklas Potrafke; Fabian Ruthardt; Kaspar Wüthrich; Fabian Ruthardt

  1. By: Anastasia Latina; Dimitrios Varvarigos
    Abstract: We study the relation between conjugal family ties and corruption, as well as the important role of this relation for the cultural transmission of preferences regarding the strength of family ties. We show that the impact of family ties on the level of corruption, which can be either positive or negative, feeds back into the very process through which preferences for family ties are diffused from the older to the younger generations. As a result, the relation between family ties and corruption sets in motion mechanisms that govern the dynamics of cultural transmission. These dynamics determine long-term outcomes in terms of the population’s cultural homogeneity or diversity with regard to their attitudes towards family ties.
    Keywords: Corruption, Cultural transmission, Family ties
    JEL: A13 D73 Z13
    Date: 2020–04
  2. By: Palma, Nuno (University of Manchester; ICS, Universidade de Lisboa; CEPR); Papadia, Andrea (University of Bonn); Pereira, Thales (São Paulo School of Economics/FGV); Weller, Leonardo (São Paulo School of Economics/FGV)
    Abstract: This paper brings new evidence on the legacy of slavery to economic development through the case study of Brazil during the nineteenth century. The conclusions contribute to the debate brought by the New History of Capitalism (NHC) about the role of slavery and industrialization in the United States. We argue that the NHC lacks a comparative perspective. Brazil imported more slaves than any other country in the world and slavery lasted longer and was more widespread than in the U.S. south. Rather than promoting economic growth and development, the evidence shows that slavery held back industrialization in Brazil. We also discuss the role of slavery on agricultural productivity and show that, as in the U.S. the use of violence does not explain increases in the productivity of cotton plantations.
    Keywords: Slavery, Comparative History, New History of Capitalism JEL Classification:
    Date: 2020
  3. By: He, Qichun; Wang, Xilin
    Abstract: We incorporate endogenous human capital accumulation into a scale-invariant Schumpeterian growth model with endogenous market structure. Endogenous human capital accumulation leads to continuous entry of firms. Therefore, continuous horizontal innovation is sustained by human capital accumulation in the absence of population growth and becomes a twin engine of long-run growth (together with vertical innovation). We then study monetary policy by considering a cash-in-advance constraint on consumption. We find that when the capital share in final good production is low (high), the effect of inflation on growth is positive (negative). We then use cross-country panel regressions to test the theoretical prediction and find that inflation and capital share have a significant, negative interaction effect on growth, which provides support for our theory.
    Keywords: Monetary policy; Human capital; Endogenous market structure; Economic growth
    JEL: E41 I15 O30 O40
    Date: 2020–12
  4. By: Florian Pelgrin (EDHEC Business School); Alain Venditti (Aix-Marseille Univ., CNRS, AMSE and EDHEC Business School)
    Abstract: This paper provides a long-run cycle perspective to explain the behavior of the annual flow of inheritance as identified by Piketty [51] for France and Atkinson [3] for the UK. Using a two-sector Barro-type [9] OLG model with non-separable preferences and bequests, we show that endogenous fluctuations are likely to occur through period-2 cycles or Hopf bifurcations. Two key mechanisms, which can generate independently or together quasi-periodic cycles, can be identified as long as agents are sufficiently impatient. The first mechanism relies on the elasticity of intertemporal substitution or equivalently the sign of the cross-derivative of the utility function whereas the second rests on sectoral technologies through the sign of the capital intensity difference across two sectors. Furthermore, building on the quasi-palindromic nature of the degree-4 characteristic equation, we derive some meaningful sufficient conditions associated to the occurrence of complex roots in a two-sector OLG model. Finally, we show that our theoretical results are consistent with some empirical evidence for medium- and long-run swings in the inheritance flows as a fraction of national income in France over the period 1896-2008.
    Keywords: two-sector overlapping generations model, optimal growth, endogenous fluctuations, quasi-palindromic polynomial, periodic and quasi-periodic cycles, altruism, bequest
    JEL: C62 E32 O41
    Date: 2020–12
  5. By: Brandt, Loren (University of Toronto); Rawski, Thomas G. (University of Pittsburgh)
    Abstract: Beginning in the late 1970s, China's economy delivered the largest growth spurt in recorded history. Striking discontinuity between recent outcomes and the economic experience of the prior 200 years invites portrayal of recent events as a "China miracle" that requires neither economic nor historical analysis. This overlooks deep institutional constraints arising from authoritarian rule and its supporting elite networks and fails to recognize the link between central government weakness and the origins of the recent boom. In both the pre-1949 treaty ports and in the aftermath of the Cultural Revolution, the retreat of central control enabled episodes of economic openness and dynamism built upon 'bottom up' initiative and decentralized innovation. Historic legacies that shape political structures and individual behavior will continue to influence China's economic trajectory.
    Keywords: China, economic boom, growth constraints, authoritarian rule, elite networks, governmental weakness, innovation, productivity
    JEL: L2 N1 N4 O4 O5 P3
    Date: 2020–12
  6. By: Gay, Victor
    Abstract: This article explores the pathways that underlie the diffusion of women’s participation in the labor force across generations. I exploit a severe exogenous shock to the sex ratio, World War I in France, which generated a large inflow of women in the labor force after the war. I show that this shock to female labor transmitted to subsequent generations until today. Three mechanisms of intergenerational transmission account for this result: parental transmission, transmission through marriage, and transmission through local social interactions. Beyond behaviors, the war also permanently altered beliefs toward the role of women in the labor force.
    Keywords: Female labor force participation; World War I; Sex ratio; Intergenerational transmission; Gender norms
    Date: 2021–01–07
  7. By: Niklas Potrafke; Fabian Ruthardt; Kaspar Wüthrich; Fabian Ruthardt
    Abstract: We investigate how protectionist policies influence economic growth. Our empirical strategy exploits an extraordinary tax scandal that gave rise to an unexpected change of government in Sweden. A free-trade majority in parliament was overturned by a protectionist majority in 1887. We employ the synthetic control method to select control countries against which economic growth in Sweden can be compared. We do not find evidence suggesting that protectionist policies influenced economic growth and examine channels why. Tariffs increased government revenue. However, the results do not suggest that the protectionist government stimulated the economy in the short-run by increasing government expenditure.
    Keywords: protectionism, economic growth, first era of globalization, synthetic control method, causal inference
    JEL: C33 D72 F10 F13 N10 O11
    Date: 2020

This nep-gro issue is ©2021 by Marc Klemp. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.