nep-gro New Economics Papers
on Economic Growth
Issue of 2021‒09‒20
seven papers chosen by
Marc Klemp
University of Copenhagen

  1. Economics and Family Structures By Thomas TB Baudin; Bram De Rock; Paula Eugenia Gobbi
  2. The Impact of Body Mass Index on Growth, Schooling, Productivity, and Savings: A Cross-Country Study By Tansel, Aysit; Öztürk, Ceyhan; Erdil, Erkan
  3. Technical change and the postwar slowdown in Soviet economic growth By Kukic, Leonard
  4. Demographic Change and Economic Growth in India By Jain, Neha; Goli, Srinivas
  5. Fourier DF unit root test for R&D intensity of G7 countries. By Yifei Cai; Jamel Saadaoui
  6. Remittances, Natural Resource Rent and Economic Growth in Sub-Saharan Africa By Pamela E. Ofori; Daryna Grechyna
  7. Identifying the Main Factors of Iran's Economic Growth using Growth Accounting Framework By Mohammadreza Mahmoudi

  1. By: Thomas TB Baudin; Bram De Rock; Paula Eugenia Gobbi
    Abstract: Household decisions are one of the key elements impacting many dimensions of any economy. In this paper, we review the economic literature onfamily types, focusing on nuclear, stem, and complex families. We show that family types are heterogeneous across and within countries, both inthe past and in present times. We argue that economists have focused too much their analysis on nuclear families, which may limit our capacity toanalyze the impact of institutional phenomena or public policies. We establish how each family type could relate to the basic ingredients of standardstructural models of household decisions. We believe this overview sets the stage for an interesting research avenue to improve the structural models of household decision making.
    Keywords: Family structures, Economic development, Household decisions
    Date: 2021–09
  2. By: Tansel, Aysit; Öztürk, Ceyhan; Erdil, Erkan
    Abstract: We examine the relationship between wealth and health through prominent growth indicators and cognitive ability. Cognitive ability is represented by nutritional status. In this study, the proxy variable for nutritional status is BMI since there is a strong relationship between cognitive ability and nutrition. We use the reduced form equation in the cubic specification of time preference rate to estimate this relationship. We assume that the time preference rate is one of the outputs of cognitive ability. The growth indicators utilized are GDP per capita, schooling, overall and manufacturing productivities, and savings. We estimate our models using the FE, GMM estimators, and long difference OLS and IV estimation through balanced panel data for 47 countries for the 1980-2009 period, which is a representative period of the neo-liberal and globalization economic policy implications. Furthermore, by using the 1980-2009 period, we may eliminate the ripple effects of the 2007-2009 financial crisis. Although there is ample evidence that the association between GDP per capita, overall and manufacturing productivities, and BMI could be cubic, we take the results of the long-difference quadratic specification into consideration and conclude that the relationship between all prominent growth indicators and BMI is inverse U-shaped. In other words, cognitive ability has a significant potential to progress growth and economic development only in a healthy status.
    Keywords: Cognitive ability,time preference rate,BMI,productivity,health,schooling,growth,economic development
    JEL: E21 I15 I25 J24 O11 Q18
    Date: 2021
  3. By: Kukic, Leonard
    Abstract: The existing studies usually find that technical change was very important in constraining the economic growth of the Soviet Union. While these studies have been successful in quantifying the extent of technical change, they have been less successful in quantifying its nature. This paper probes the essence of technical change by analysing its direction and bias. I find that the Soviet Union achieved strong increases in labour efficiency until the 1960s. Although the labour efficiency growth subsequently slowed down, it is capital efficiency that drove the postwar slowdown in economic growth. I argue that labour shortages, combined with an inadequate investment policy, retarded the Soviet capital efficiency.
    Keywords: Soviet Union; Economic Growth; Technical Change; Economic History
    JEL: O47 O33 N14 P27
    Date: 2021–09–10
  4. By: Jain, Neha (Indian Institute of Foreign Trade); Goli, Srinivas
    Abstract: In this paper, we assess the economic benefits of demographic changes in India by employing econometric models and robustness checks based on panel data gathered over a period of more than three decades. Our analysis highlights four key points. First, the contribution of India’s demographic dividend is estimated to be around 1.9 percentage points out of 12% average annual growth rate in per capita income during 1981–2015. Second, India’s demographic window of opportunity began in 2005, significantly improved after 2011, and will continue till 2061. Third, our empirical analysis supports the argument that the realisation of the demographic dividend is conditional on a conducive policy environment with enabling aspects such as quality education, good healthcare, decent employment opportunities, good infrastructure, and gender empowerment. Fourth, the working-age population in India contributes around one-fourth of the inequality in per capita income across states. Thus, to reap the maximum dividends from the available demographic window of opportunity, India needs to work towards enhancing the quality of education and healthcare in addition to providing good infrastructure, gender empowerment, and decent employment opportunities for the growing working-age population.
    Date: 2021–09–04
  5. By: Yifei Cai; Jamel Saadaoui
    Abstract: According to the Schumpeterian endogenous growth theory, the efficacy of R&D is lowered by the proliferation of products. To be consistent with empirical data, the ratio between innovative activity and product variety (also called R&D intensity) must be stationary. In this perspective, our contribution investigates whether the R&D intensity series are stationary when structural breaks are considered. Our sample of G7 countries is examined over the period spanning from 1870 to 2016. Our results indicate that traditional unit root tests (ADF, DF-GLS and KPSS) conclude that the R&D intensity series are non-stationary in contradiction with the Schumpeterian endogenous growth theory. The conclusions of these traditional unit root tests may be misleading, as they ignore the presence of structural breaks. Indeed, we use several types of Fourier Dickey-Fuller tests to consider the presence of structural breaks. In the Fourier Dickey-Fuller unit root tests using double frequency and fractional frequency, the R&D intensity is significantly stationary at least at the 5% level for Canada, France, Germany, Italy, Japan when a deterministic trend is included in the tests. Nevertheless, the R&D intensity is non-stationary for the US, even when we consider structural breaks. Indeed, the integration analyses aimed at discriminating between competing theories of endogenous growth should be careful of the presence of structural breaks. Especially when historical data are used, traditional unit root tests may lead to erroneous economic interpretations. These findings may help to understand the true nature of long-run economic growth and may help to formulate sound policy recommendations.
    Keywords: R&D intensity; Schumpeterian growth model; Double frequency; Fourier DickeyFuller unit root test.
    JEL: C12 C22 O30 O40
    Date: 2021
  6. By: Pamela E. Ofori (Department of Economics, University of Insubria); Daryna Grechyna (University of Granada, Spain)
    Abstract: Despite the established link between oil rent fluctuations and remittances received, its plausible joint effect on economic growth in Sub-Saharan Africa (SSA) remains unexplored. To fill this gap, first we determine whether natural resource rent (composed of oil rent, forest rent and natural gas rent) reduces economic growth in SSA. Second, we examine whether positive macroeconomic signals such as remittances mitigate the negative effect of oil rents on economic growth in a sample of 43 SSA countries spanning 1990-2017. We employ the pooled ordinary least squares, fixed-effects and random-effects, and generalized method of moments. The resulting empirical evidence established are; (1) There is a positive impact of forest rent on economic growth whilst oil rent and natural gas rent have a negative impact on economic growth. (2) There is a positive marginal and net effect on economic growth from the interaction between remittances and oil rent. Also, the unconditional effect of remittances on growth is positive. We further perform a threshold analysis to establish a critical ground that could also influence economic growth positively. This threshold is crucial because above these critical mass remittance inflows mitigate the negative incidence of oil rent on economic growth and below the threshold negative oil rent on growth is completely nullified. This is relevant for policy implications because policy makers are provided with actionable levels of remittances which are easily attainable in sampled countries.
    Keywords: Remittances, Natural resource rent, oil rent, Economic growth, Sub-Saharan Africa.
    Date: 2021–01
  7. By: Mohammadreza Mahmoudi
    Abstract: This paper aims to present empirical analysis of Iranian economic growth from 1950 to 2018 using data from the World Bank, Madison Data Bank, Statistical Center of Iran, and Central Bank of Iran. The results show that Gross Domestic Product (GDP) per capital increased by 2 percent annually during this time, however this indicator has had a huge fluctuation over time. In addition, the economic growth of Iran and oil revenue have close relationship with each other. In fact, whenever oil crises happen, great fluctuation in growth rate and other indicators happened subsequently. Even though the shares of other sectors like industry and services in GDP have increased over time, the oil sector still plays a key role in the economic growth of Iran. Moreover, growth accounting analysis shows contribution of capital plays a significant role in economic growth of Iran. Furthermore, based on growth accounting framework the steady state of effective capital is 4.27 for Iran's economy.
    Date: 2021–09

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