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on Economic Growth |
| By: | Gustavo Pereira Serra (Department of Economics, New School for Social Research) |
| Abstract: | This paper addresses the contribution of human capital accumulation to solving the First Harrod Problem, which relates to the di erence between demand-led and natural growth rates in the long run. To some extent, this paper also relates to the literature on labor-saving technical change represented as a costly process. Moreover, I show how a model that considers human capital accumulation can address overeducation and technical change. I argue that human capital formation and technological progress are complementary in economic growth: the former ensures the stability of the employment rate on the balanced growth path, whereas the latter determines its level. |
| Keywords: | Human Capital, Post-Keynesian Economics, First Harrod Problem, Harrodian Instability, Aggregate Productivity |
| JEL: | E11 E12 E24 O40 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:2113&r= |
| By: | Grossman, Gene M.; Helpman, Elhanan; Oberfield, Ezra; Sampson, Thomas |
| Abstract: | We study the determinants of factor shares in a neoclassical environment with capital-skill complementarity and endogenous education. In this environment estimates of the elasticity of substitution between capital and labor that fail to account for human capital levels will be biased upward. We develop a model with overlapping generations, technology-driven neoclassical growth, and ongoing increases in educational attainment. For a class of production functions featuring capital-skill complementarity, a balanced growth path exists and is characterized by an inverse relationship between the rates of capital-and labor-augmenting technological progress and the capital share in national income. |
| Keywords: | neoclassical growth; balanced growth; human capital; education; technological progress; capital-skill complementarity; capital share; labor share |
| JEL: | E25 J24 O41 |
| Date: | 2021–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:106968&r= |
| By: | Horrell, Sara; Humphries, Jane; Weisdorf, Jacob |
| Abstract: | Malthus believed that rising real wages encouraged earlier marriage, higher fertility and a growing population. But diminishing returns in agriculture meant that an organic economy could not keep pace. Excess labour and rising food prices drove wages down and brought population growth to a halt. Studies testing this hypothesis have focussed on the relationship between population growth and men’s wages, typically overlooking women and children’s economic activities and influence on demographic outcomes. New daily and annual wage series, including women and children, enable these missing actors to be incorporated into a more complete account of Malthus’s hypothesis. New findings emerge: the demographic reaction to wage changes was gendered. Early-modern bachelors responded to rising male wages by marrying earlier, whereas spinsters responded to rising female wages by delaying marriage. Our evidence suggests that women played a key role in England’s low- fertility demographic regime and escape from the Malthusian trap. More tentatively, we consider the demographic regime in medieval England. Although marriage was related to earnings, the size of the population was a forceful determinant of economic outcomes. While superficially similar in terms of the prevalence of late marriage and low nuptiality, this regime was consolidated by poverty and social control absent the female agency of the later era. |
| JEL: | N33 |
| Date: | 2020–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:105553&r= |
| By: | Michael Fritsch (Friedrich Schiller University Jena, Germany); Martin Obschonka (Queensland University of Technology, Brisbane, Australia); Fabian Wahl (University of Hohenheim, Germany); Michael Wyrwich (University of Groningen, The Netherlands, and Friedrich Schiller University Jena, Germany) |
| Abstract: | A region’s present-day economic performance can be deeply anchored in historical factors. We provide the first systematic evidence of a deep imprinting effect in the context of Roman rule in the south-western part of Germany nearly 2,000 years ago. Our analysis reveals that regions in the former Roman part of Germany show a stronger entrepreneurship and innovation culture today, evident by higher levels of quantity and quality entrepreneurship and innovation. The data indicate that this lasting 'Roman effect' was constituted by the early establishment of interregional social and economic exchange and related infrastructure. Our findings thus help in unpacking the hidden cultural roots of present-day economic performance, with important implications for research and economic policy. |
| Keywords: | Entrepreneurship, innovation, historical roots, Romans, Limes |
| JEL: | N9 O1 I31 |
| Date: | 2021–08–11 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2021-012&r= |
| By: | Ly Dai Hung (Vietnam Institute of Economics, Hanoi, Vietnam) |
| Abstract: | The paper investigates the dependence pattern of economic growth on external debts supply by accounting for the safety of debts, measured by the sovereign debts rating. The method of cross-section regression is based on a sample of 145 advanced and developing economies with averaged data over 1990-2019 period. The pattern of economic growth follows an U-shaped curve, for which the growth rate is first decreasing then increasing on the external debts supply. An possible explaination can rely on the sovereign debts rating. For low supply of external debts, a higher supply of debts reduces the debts rating, which, in turn, lowers the economic growth rate. But for high enough supply of debts, more debts raise their rating, then, improving the growth rate. These results are robust on controlling for various determinants of economic growth and on the fixed-effect panel regression. |
| Keywords: | Economic Growth,Cross-Section Regression,Panel Regression,External Debts |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03277527&r= |
| By: | Katharina Erhardt; Simon Haenni |
| Abstract: | Can culture explain persistent differences in economic activity among individuals and across regions? A novel measure of cultural origin enables us to contrast the entrepreneurial activity of individuals located in the same municipality but whose ancestors lived just on opposite sides of the Swiss language border in the 18th century. Individuals with ancestry from the German-speaking side create 20% more firms than those with ancestry from the French-speaking side. These differences persist over generations and independent of the predominant culture at the current location. Yet, founders’ ancestry does not affect exit or growth of newly-founded firms. A model of entrepreneurial choice and complementary survey evidence suggest that the empirical patterns are mainly explained by differences in preferences, rather than skill. The results have sizable economic implications, accounting for 120,000 additional jobs over a period of 15 years. |
| Keywords: | culture, entrepreneurship, natural experiment, spatial RDD |
| JEL: | D22 L26 O12 Z10 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9198&r= |
| By: | Piergiorgio Alessandri; Haroon Mumtaz |
| Abstract: | We study the impact of climate volatility on economic growth exploiting data on 133 countries between 1960 and 2005. We show that the conditional (ex-ante) volatility of annual temperatures increased steadily over time, rendering climate conditions less predictable across countries, with important implications for growth. Controlling for concomitant changes in temperatures, a +1oC increase in temperature volatility causes on average a 0.9 percent decline in GDP growth and a 1.3 percent increase in the volatility of GDP. Unlike changes in average temperatures, changes in temperature volatility affect both rich and poor countries. |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2108.01617&r= |
| By: | Tarna Silue (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne) |
| Abstract: | The paper focuses on the relationship between economic growth and financial inclusion in developing countries. One of the main innovations of the analysis is to report on the contribution to developing new digital financial services such as mobile money. To do this, I first realize a simple endogenous growth model in which the role of the financial sector is to provide sources of investment to included population. The model indicates that consumption could be the main channel through financial inclusion, contributing to growth. Then, the empirical estimation realized using the Generalized Method of Moments (GMM) with 57 countries over 2007-2017 evaluates the impacts of traditional and digital inclusion on growth. The results confirm the positive effect of financial inclusion on growth. For formal inclusion, estimators reveal that the financial system deposits contribute to growth in developing countries. Concerning digital inclusion, we note that an active mobile money account has a higher positive impact on growth than standard inclusion. |
| Keywords: | Endogenous growth,Financial inclusion,Mobile money,GMM System |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03281843&r= |
| By: | Ibrahim D. Raheem (The EXCAS, Liege, Beligium); Kazeem B. Ajide (University of Lagos, Nigeria); Xuan V. Vo (University of Economics Ho Chi Minh City, Vietnam) |
| Abstract: | The trilogy among economic growth, social capital (SC), and financial development is examined based on three hypotheses: first, SC is important in the finance-growth nexus. Second, there is a threshold effect of SC in the finance-growth nexus. Third, the SC-finance-growth trilogy depends on the countries' income level. Building dataset for 70 countries,someinteresting results were obtained: (i) the marginal effects of both SC and finance promotes economic growth at higher levels; (ii)there is evidence of a threshold effect of SC, as finance enhances more growth when SC is below the threshold level; (iii) higher-income countries tend not to benefit from the SC-finance-growth trilogy. These results suggest that the influence of SC on growth trajectory is exaggerated in the literature. The study recommends that policymakers should pursue other sources of economic growth aside SC, while ensuring that the level of SC does not deteriorate. |
| Keywords: | Economic growth, Financial development, Social capital, and Threshold effect |
| JEL: | O43 G20 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:21/050&r= |