nep-gro New Economics Papers
on Economic Growth
Issue of 2021‒05‒17
eight papers chosen by
Marc Klemp
University of Copenhagen

  1. Productivity and the Welfare of Nations By Basu, Susanto; Pascali, Luigi; Schiantarelli, Fabio; Servén, Luis
  2. The Napoleonic Wars: A Watershed in Spanish History By Prados de la Escosura, Leandro; Santiago-Caballero, Carlos
  3. Vernacularization and Linguistic Democratization By Binzel, Christine; Link, Andreas; Ramachandran, Rajesh
  4. Measuring Inequality from Above By José García-Montalvo; Marta Reynal-Querol; Juan Carlos Muñoz Mora
  5. Heat and Hate: Climate Security and Farmer-Herder Conflicts in Africa By Eberle, Ulrich J.; Rohner, Dominic; Thoenig, Mathias
  6. A Technology-Gap Model of Premature Deindustrialization By Fujiwara, Ippei; Matsuyama, Kiminori
  7. More Laws, More Growth? Evidence from U.S. States By Ash, Elliott; Morelli, Massimo; Vannoni, Matia
  8. British-French technology transfer from the Revolution to Louis Philippe (1791-1844): evidence from patent data By Nuvolari, Alessandro; Tortorici, Gaspare; Vasta, Michelangelo

  1. By: Basu, Susanto; Pascali, Luigi; Schiantarelli, Fabio; Servén, Luis
    Abstract: We show that the welfare of a countryiÌ s infinitely-lived representative consumer is summarized, to a first order, by total factor productivity (TFP), appropriately defined, and by the capital stock per capita. The result holds for both closed and open economies, regardless of the type of production technology and the degree of product market competition. Welfare-relevant TFP needs to be constructed with prices and quantities as perceived by consumers, not firms. Thus, factor shares need to be calculated using after-tax wages and rental rates. We use these results to calculate welfare gaps and growth rates in a sample of advanced countries with high-quality data on output, hours worked, and capital. We also present evidence for a broader sample that includes both advanced and developing countries.
    Keywords: productivity; Solow residual; TFP; welfare
    JEL: D24 D90 E20 O47
    Date: 2020–12
  2. By: Prados de la Escosura, Leandro; Santiago-Caballero, Carlos
    Abstract: The Napoleonic Wars had dramatic consequences for Spain's economy. The Peninsular War had higher demographic impact than any other military conflict, including civil wars, in the modern era. Farmers suffered confiscation of their crops and destruction of their main capital asset, livestock. The shrinking demand, the disruption of international and domestic trade, and the shortage of inputs hampered industry and services. The loss of the American colonies, a by-product of the French invasion, seriously harmed absolutism. In the long run, however, the Napoleonic Wars triggered the dismantling of Ancien Régime institutions and interest groups. Freed from their constraints, the country started a long and painful transition towards the liberal society. The Napoleonic Wars may be deemed, then, as a watershed in Spanish history.
    Keywords: growth; Institutional Change; Napoleonic Wars; Peninsular War; Spain
    JEL: E02 F54 N13 N43
    Date: 2020–12
  3. By: Binzel, Christine; Link, Andreas; Ramachandran, Rajesh
    Abstract: The use of a language in written and formal contexts that is distinct from the varieties used in everyday communication - such as Latin in early modern Europe and Standard Arabic in the Arabic-speaking world - comes with benefits, but also with costs. Drawing on city-level data on all books and pamphlets published in Europe between 1451 and 1600, we document that the Protestant Reformation led to a sharp rise in vernacular printing, such that by the end of the 16th century, the majority of works were printed in spoken tongues rather than in Latin. This transformation allowed broader segments of society to access knowledge. It was also associated, as we show, with a significant diversification in the composition of authors and book content. Finally, we provide evidence that an increase in vernacular printing at the city level is strongly correlated with higher population growth - a proxy for economic development - and in the birth of notable innovators and creative individuals. In this way, we argue that the vernacularization of printing was an important driver of European dynamism in the early modern period.
    Keywords: economic development; Inclusive institutions; Language; Protestant Reformation
    JEL: E02 N13 Z12 Z13
    Date: 2020–11
  4. By: José García-Montalvo; Marta Reynal-Querol; Juan Carlos Muñoz Mora
    Abstract: Recent research has shown the usefulness of nighttime light (NTL) data as a proxy for growth and economic activity. This paper explores the potential of using luminosity at night, recorded by satellite imagery, to construct measures of inequality. We develop a new methodology to construct a Gini index for each country using the nighttime light per capita over millions of small pixels. To assess the usefulness of our procedure, we check the correlation of our measure with the common factor extracted from the analysis of several Gini indices calculated using traditional data sources. Finally, we show two specific applications of our methodology: the calculation of within and between inequality across regions and ethnic groups.
    Keywords: Inequality, inequality between and within decomposition, nighttime light, development
    JEL: O10
    Date: 2021–05
  5. By: Eberle, Ulrich J.; Rohner, Dominic; Thoenig, Mathias
    Abstract: This paper investigates the impact of climate shocks on violence between herders and farmers by using geolocalized data on conflict events for all African countries over the 1997-2014 period. We find that a +1°C increase in temperature leads to a +54% increase in conflict probability in mixed areas populated by both farmers and herders, compared to +17% increase in non-mixed areas. This result is robust to controlling for the interaction between temperature and ethnic polarization, alternative estimation techniques, disaggregation levels, and coding options of the climatic/conflict/ethnic variables. We then quantify the impact on conflicts of projected climate change in 2040. We find that, in absence of mixed areas, global warming would increase total annual conflicts by about a quarter in whole Africa; when factoring in the magnifying effect of mixed settlements, total annual conflicts are predicted to rise by as much as a third. We also provide two pieces of evidence that resource competition is a major driver of farmer-herder violence. Firstly, conflicts are much more prevalent at the fringe between rangeland and farmland --a geographic buffer of mixed usage that is suitable for both cattle herding and farming but is particularly vulnerable to climate shocks. Secondly, information on groups' mobility reveals that temperature spikes in the ethnic homeland of a nomadic group tend to diffuse its fighting operations outside its homeland, with a magnified spatial spread in the case of conflicts over resources. Finally, we show that violence is substantially reduced in the presence of policies that empower local communities, foster participatory democracy, enforce property rights and regulate land dispute resolution.
    Keywords: Africa; climate change; farmer-herder conflict; nomadic; resource competition; Sahel; Temperature; Violence
    JEL: D74 N47 O13 Q34 Z13
    Date: 2020–12
  6. By: Fujiwara, Ippei; Matsuyama, Kiminori
    Abstract: This paper presents a simple model of what Rodrik (2016) called "premature deindustrialization," the tendency that late industrializers reach their peaks of industrialization at lower levels of per capita income with the lower peak shares of manufacturing, compared to early industrializers. In this model, the hump-shaped path of the manufacturing share in each country is driven by the frontier technology whose productivity growth rate differs across the sectors. The countries are heterogenous in their "technology gaps," their capacity to adopt the frontier technology, which might affect adoption lags across sectors differently. In this setup, we show that premature deindustrialization occurs, for example, if adoption takes longer in the service sector, and yet the productivity growth rate in the service sector is sufficiently smaller such that cross-country productivity differences are smaller in the service sector.
    Keywords: adoption lags; premature deindustrialization; sectoral productivity growth rate differences; structural change; technology gap
    JEL: O11 O14 O33
    Date: 2020–12
  7. By: Ash, Elliott; Morelli, Massimo; Vannoni, Matia
    Abstract: This paper analyzes the conditions under which more detailed legislation contributes to economic growth. In the context of U.S. states, we apply natural language processing tools to measure legislative flows for the years 1965-2012. We implement a novel shift-share design for text data, where the instrument for legislation is leave-one-out legal-topic flows interacted with pre-treatment legal topic shares. We find that at the margin, higher legislative detail causes more economic growth. Motivated by an incomplete-contracts model of legislative detail, we test and find that the effect is driven by contingent clauses, that the effect is concave in the pre-existing level of detail, and that the effect size is increasing with economic policy uncertainty.
    Date: 2021–01
  8. By: Nuvolari, Alessandro; Tortorici, Gaspare; Vasta, Michelangelo
    Abstract: This paper examines the patterns of technology transfer from Britain to France during the early phases of industrialization; it does so by making use of a dataset comprising all patents granted in France during the period 1791-1844. Exploiting the peculiarities of the French legislation, we construct an array of patent quality indicators and econometrically investigate their determinants. We find that patents filed by British inventors or French inventors personally linked with British ones were of relatively higher quality. Overall, our results show that the French innovation system was effectively capable of attracting and absorbing key technologies from Britain.
    Keywords: Britain; France; industrial revolution; patents; Technology Transfer
    JEL: N73 O3
    Date: 2020–12

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