nep-gro New Economics Papers
on Economic Growth
Issue of 2021‒05‒10
eight papers chosen by
Marc Klemp
University of Copenhagen

  1. Culture, Institutions & the Long Divergence By Bisin, Alberto; Rubin, Jared; Seror, Avner; Verdier, Thierry
  2. Directed Technical Change in Labor and Environmental Economics By Hémous, David; olsen, morten
  3. Capital and Economic Growth in Britain, 1270-1870: Preliminary Findings By Broadberry, Stephen N; de Pleijt, Alexandra
  4. HERSTORY: The rise of self-made women By Nekoei, Arash; Sinn, Fabian
  5. Accounting for the Great Divergence: Recent Findings from Historical National Accounting By Broadberry, Stephen N
  6. Historical gender discrimination does not explain comparative Western European development: evidence from Portugal, 1300-1900 By Palma, Nuno Pedro G.; Reis, Jaime Brown; Rodrigues, Lisbeth
  7. Did the Cold War Produce Development Clusters in Africa? By Castaneda Dower, Paul; Gokmen, Gunes; Le Breton, Michel; Weber, Shlomo
  8. The asymmetric evolution of economic institutions: evidence from dynamic panel quantile regression with iv and fixed effects. By Michel Cândido de Souza; Lízia de Figueiredo; Mauro Sayar Ferreira

  1. By: Bisin, Alberto; Rubin, Jared; Seror, Avner; Verdier, Thierry
    Abstract: Recent theories of the Long Divergence between Middle Eastern and Western European economies focus on Middle Eastern (over-)reliance on religious legitimacy, use of slave soldiers, and persistence of restrictive proscriptions of religious (Islamic) law. These theories take as exogenous the cultural values that complement the prevailing institutions. As a result, they miss the role of cultural values in either supporting the persistence of or inducing change in the economic and institutional environment. In this paper, we address these issues by modeling the joint evolution of institutions and culture. In doing so, we place the various hypotheses of economic divergence into one, unifying framework. We highlight the role that cultural transmission plays in reinforcing institutional evolution toward either theocratic or secular states. We extend the model to shed light on political decentralization and technological change in the two regions.
    Keywords: cultural transmission; institutions; Legitimacy; Long Divergence; religion
    JEL: N34 N35 O10 O33 P16 P48 Z12
    Date: 2021–02
  2. By: Hémous, David; olsen, morten
    Abstract: It is increasingly evident that the direction of technological responds to economic incentives. We review the literature on directed technical change in the context of environmental economics and labor economics, and show that these fields have much in common both theoretically and empirically. We emphasize the importance of a balanced growth path. We show that the lack of such a path is closely related to the slow development of green technologies in environmental economics and growing inequality in labor economics. We discuss whether the direction of innovation is efficient.
    Keywords: automation; climate change; DTC; Endogenous Growth; Income inequality
    JEL: E25 J24 O31 O33 O41 O44 Q55
    Date: 2021–01
  3. By: Broadberry, Stephen N; de Pleijt, Alexandra
    Abstract: Estimates of capital formation and the stock of capital in Britain are provided for the period 1270-1870 and used to analyse economic growth. (1) We chart the growing importance of fixed relative to working capital, the declining importance of land and the growth of net overseas assets. (2) Kaldor's stylised facts of a rising capital-labour ratio and a stationary capital-output ratio are broadly confirmed, but only if attention is confined to fixed capital. (3) Extensive form growth accounts suggest that output growth was driven largely by factor input growth, while intensive form growth accounts suggest that TFP growth was more important than capital deepening in explaining the growth of output per head. (4) The investment share of GDP increased substantially during the transition from pre-industrial to modern economic growth.
    Keywords: Britain; Capital; economic growth; Long Run
    JEL: N13 N33 O10 O47
    Date: 2021–03
  4. By: Nekoei, Arash; Sinn, Fabian
    Abstract: We document the evolution of women's status across the globe and throughout recorded history. We first construct a new database of seven million notable individuals (Human Biographical Record). We then measure women's status as women's share among the most prominent fraction of population that allows comparison across time and space. The records show no long-run trend in women's share in recorded history. Historically, women's power has been a side-effect of nepotism: the more important family connections, the higher the women's share. But self-made women began to rise among the writers in the 17th century before a broader take off started with the 1800 birth cohort: first among artists and scholars, followed by elected politicians, and finally appointed politicians. The first wave among writers emerged when informal humanist education and new public spheres shaped a supply of literary women, who met the demand of a new female reading public. A strong writer wave predicts a stronger takeoff of self-made women in the 19th century. This effect has persisted and created cross-country divergence.
    Keywords: Big Data; Women emancipation
    JEL: I24 J16 N00
    Date: 2021–01
  5. By: Broadberry, Stephen N
    Abstract: As a result of recent work on historical national accounting, it is now possible to establish more firmly the timing of the Great Divergence of living standards between Europe and Asia in the eighteenth century. There was a European Little Divergence as Britain and the Netherlands overtook Italy and Spain, and an Asian Little Divergence as Japan overtook China and India. The Great Divergence occurred because Japan grew more slowly than Britain and the Netherlands starting from a lower level, and because of a strong negative growth trend in Qing dynasty China. A growth accounting framework is used to assess the contributions of labour, human and physical capital, land and total factor productivity. In addition to these proximate sources, the roles of institutions and geography are examined as the ultimate sources of the divergent growth patterns.
    Keywords: explanation; Great Divergence; living standards; Measurement
    JEL: N10 N30 N35 O10 O57
    Date: 2021–03
  6. By: Palma, Nuno Pedro G.; Reis, Jaime Brown; Rodrigues, Lisbeth
    Abstract: Gender discrimination has been pointed out as a determining factor behind the long-run divergence in incomes of Southern vis-a-vis Northwestern Europe. In this paper, we show that there is no evidence that women in Portugal were historically more discriminated against than those of other parts of Western Europe, including England and the Netherlands. We rely on a new dataset of thousands of observations from archival sources which cover six centuries, and we complement it with a qualitative discussion of comparative social norms. Compared with Northwestern Europe, women in Portugal faced similar gender wage gaps, married at similar ages, and did not face more restrictions to labor market participation. Consequently, other factors must be responsible for the Little Divergence of Western European incomes.
    Keywords: Comparative development; Culture; European Marriage Pattern; gender wage gap; Historical gender discrimination; Social norms; the Little Divergence
    JEL: J16 N13 N33
    Date: 2021–03
  7. By: Castaneda Dower, Paul; Gokmen, Gunes; Le Breton, Michel; Weber, Shlomo
    Abstract: This paper examines the lasting impact of the alignment of African countries during the Cold War on modern economic development. We show that the division of the continent into two blocs (East/West) led to two clusters of development outcomes that reflect the Cold War's ideological divide. To determine alignment, we introduce a non-cooperative game of social interactions between African countries, where every country chooses one of two existing blocs based on its predetermined bilateral similarities with other members of the bloc. We show the existence of a strong Nash equilibrium in our game and apply the celebrated MaxCut method to identify such a partition. We validate the alignment by confirming that it predicts UN General Assembly voting patterns during the Cold War. Our approach, linking global political interdependence to distinct development paths in Africa, extracts from history a micro-founded, exogenous treatment, while allowing for an endogenous, process-oriented view of historical events.
    Keywords: Africa; blocs; Cold War; Development Clusters; Landscape theory; Political Alliances; Strong Nash Equilibrium
    JEL: C62 C72 F54 F55 N47 O19 O57 Y10
    Date: 2021–02
  8. By: Michel Cândido de Souza (Universidade Federal dos Vales do Jequitinhonha e Mucuri); Lízia de Figueiredo (CEDEPLAR/UFMG); Mauro Sayar Ferreira (CEDEPLAR/UFMG)
    Abstract: We use dynamic panel quantile regressions with fixed effects and instrumental variables (IV) to detect asymmetric responses in the dynamics of economic institutions. The use of IV aims at reducing a potential bias due to correlation between initial conditions and fixed effects. Our conditional mean analyses reach standard results: economic institutions depend positively on regime durability, on the quality of political institutions, on human capital and GDP per capita. But the quantile models identify heterogeneous response of the economic institutions to idiosyncrasies. Adverse events tend to worse the economic institutions of countries with better political institutions and more durable regimes, while positive random circumstances cause the economic institutions of countries with better political institutions and longer political regime to improve more intensively. Less robust results indicate a stronger effort to ameliorate economic institutions when adversities hit a country with higher human capital and higher GDP per capita. These results have not been previously reported. Our exercises include 129 countries ranging from 1984 to 2014.
    Keywords: Institutions; Asymmetry; Quantile Regression
    JEL: E02 O43 P48
    Date: 2021–03

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