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on Economic Growth |
| By: | Yiming Cao; Benjamin Enke; Armin Falk; Paola Giuliano; Nathan Nunn |
| Abstract: | According to the widely known ‘culture of honor’ hypothesis from social psychology, traditional herding practices are believed to have generated a value system that is conducive to revenge-taking and violence. We test this idea at a global scale using a combination of ethnographic records, historical folklore information, global data on contemporary conflict events, and large-scale surveys. The data show systematic links between traditional herding practices and a culture of honor. First, the culture of pre-industrial societies that relied on animal herding emphasizes violence, punishment, and revenge-taking. Second, contemporary ethnolinguistic groups that historically subsisted more strongly on herding have more frequent and severe conflict today. Third, the contemporary descendants of herders report being more willing to take revenge and punish unfair behavior in the globally representative Global Preferences Survey. In all, the evidence supports the idea that this form of economic subsistence generated a functional psychology that has persisted until today and plays a role in shaping conflict across the globe. |
| JEL: | N0 Z1 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29250&r= |
| By: | Martina Cioni; Giovani Federico; Michelangelo Vasta |
| Abstract: | Since the early years of the 21st century, economists have started to look for the historical roots of current economic outcomes. In this article we deal with this new approach (called persistence studies), as represented by the 75 articles published in ten leading economics journals. We outline the key features (issues, period, geographical area of interest, etc.) of this articles and we discuss their citational record, in comparison with the (much more numerous) economic history articles in the same journals. We also explore the affiliation and training of the 121 authors of persistence studies, highlighting the role of some Boston institutions as the cradle of the new approach. |
| Keywords: | persistence studies, economic history, citational success, top journals |
| JEL: | A11 A12 B4 N01 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:859&r= |
| By: | Claude Diebolt (BETA - Bureau d'Économie Théorique et Appliquée - UL - Université de Lorraine - UNISTRA - Université de Strasbourg - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Charlotte Le Chapelain (Université de Lyon); Audrey Rose Menard (UN - Université de Nantes) |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03345552&r= |
| By: | Claude Diebolt (BETA - Bureau d'Économie Théorique et Appliquée - UL - Université de Lorraine - UNISTRA - Université de Strasbourg - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Tapas Mishra (University of Southampton); Faustine Perrin (BETA - Bureau d'Économie Théorique et Appliquée - UL - Université de Lorraine - UNISTRA - Université de Strasbourg - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, Lund University [Lund]) |
| Abstract: | Recent theoretical developments in growth models, triggered particularly by unified theories of growth, suggest that the child quantity-quality trade-off is a defining element in our explanation of a transition from Malthusian stagnation to a sustained growth path. This paper presents a model and derives a testable empirical framework to investigate the role of gender in the trade-off between education and fertility for 86 French counties during the 19th century. Endogeneity-mitigated mean-and median-based regressions offer robust empirical predictions for gender-empowered quantity-quality trade-off. In particular, we find the existence of a significant and negative association between education and fertility. Further, while gauging the differential effects of schooling on fertility, we find that the short-run differences between male and female are small whilst the long-run effects are large. From policy perspective, our results imply that for stable long-run growth it matters not just that parents educate their children, but specifically that they choose to educate girls. |
| Keywords: | Model of individuals' choice,Gender difference,Education,Fertility,Unified growth theory,Nineteenth century France,Quantity-quality trade-off,Cliometrics |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03345562&r= |
| By: | Daniel Spiro |
| Abstract: | What is a good reduced-form representation of Ramsey-Cass-Koopmans. (RCK) model? Solow’s model (despite non-optimizing agents) provides predictions largely consistent with a closed-economy RCK but fundamentally differs regarding open-economy income convergence. Where RCK predicts partial income and consumption convergence between open economies Solow predicts full convergence. This paper presents, by a small modification of the savings behavior in the Solow model, a framework that matches RCK’s properties in closed and open economies. The model, labeled rSolow, is analytically tractable, allowing closed-form solutions of all variables, thus makes several explicit and novel predictions. This includes how income and inequality depend on country size; that income growth will be a U-shaped function of initial income thus creating differentiated convergence; and that poor countries bene.t from higher saving but rich countries may not. |
| Keywords: | convergence, Ramsey, Solow, inequality, growth |
| JEL: | E10 E21 F21 F43 O11 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9293&r= |
| By: | Julia Wardley-Kershaw; Klaus R. Schenk-Hoppé |
| Abstract: | Economic growth transformed the world. Its measurement via GDP has risen to prominence as the pre-eminent metric of economic prowess and political success. How better to tell its story than through the lens of the world's first growing economy? Britain's experience with economic growth has been a rocky path of tremendous highs and despairing lows, but despite crises and shifts in industry growth has rolled with the punches. Our work presents an analysis of growth and crisis in the UK, surveying key ideas from academic literature in an engaging and informative manner, accessible to readers with or without a background in Economics. Our paper studies defining events in Britain's past relationship with growth, whilst engaging with pertinent contemporary debates surrounding its future. We explore the drivers of growth, the restructuring effects of crisis on productivity and employment, and the socioeconomic impacts of restricted access to the growing economy. We hope that our work provides context and depth to modern discussions, enabling readers to evaluate growth and crisis in a new light and to inform their perspectives on future growth. |
| JEL: | O1 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:man:sespap:2108&r= |
| By: | Huang, Chien-Yu; Wu, Youchang; Yang, Yibai; Zheng, Zhijie |
| Abstract: | We explore the growth and welfare effects of monetary policy in a two-sector Schumpeterian economy with cash-in-advance (CIA) constrained R&D investment in both sectors. We show that a nominal interest rate increase generates two effects on equilibrium labor allocation: a manufacturing-R&D-reallocation effect and a cross-R&D-sector effect. The former reduces economic growth by shifting labor from R&D to production, whereas the latter can enhance it by shifting labor from the less productive R&D sector to the more productive one. Unless the high productivity R&D sector is severely more CIA-constrained than the low productivity one, aggregate R&D overinvestment is sufficient but not necessary for the Friedman rule of monetary policy to be suboptimal. Our benchmark parameterization suggests that a positive nominal interest rate is optimal despite that it exacerbates the aggregate R&D underinvestment problem. |
| Keywords: | CIA constraint, Endogenous growth; Monetary policy; R&D; Creative destruction. |
| JEL: | E41 O30 O40 |
| Date: | 2021–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:109780&r= |
| By: | Roth, Felix; Sen, Ali |
| Abstract: | This contribution analyzes the impact of intangible capital on labor productivity growth across countries at the aggregate and sectoral levels by employing an econometric growth-accounting approach. First, our results show that intangible capital deepening accounts for around 40 percent of labor productivity growth at both the aggregate and sectoral level. Second, we find that this positive impact of intangible capital on productivity growth at both levels of aggregation is driven by investments in economic competencies, the only intangible group not covered in the national accounts. Third, our results reveal deep sectoral heterogeneities regarding investments and productivity effects of different intangible types. These findings have important implications for future EU industrial policies and are directly relevant to the EU's efforts to close its productivity gap with the US. |
| Keywords: | intangible capital,labor productivity growth,cross-country sectoral panel analysis,manufacturing,market services,EU |
| JEL: | C23 E22 L16 L60 L80 O47 O52 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:uhhhdp:10&r= |
| 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. The proxy variable for nutritional status is BMI. We use the reduced form equation in the cubic specification of time preference rate, strongly related to cognitive ability, to estimate this relationship. 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 the 1980-2009 period. We 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 Q11 Q18 |
| Date: | 2021–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:109738&r= |
| By: | Ana Lucia Abeliansky (Department of Economics, Vienna University of Economics and Business); Klaus Prettner (Department of Economics, Vienna University of Economics and Business) |
| Abstract: | We analyze the effects of declining population growth on automation. Theoretical considerations imply that countries with lower population growth introduce automation technologies faster. We test the theoretical implication on panel data for 60 countries over the time span 1993-2013. Regression estimates support the theoretical implication, suggesting that a 1% increase in population growth is associated with an approximately 2% reduction in the growth rate of robot density. Our results are robust to the inclusion of standard control variables, different estimation methods, dynamic specifications, and changes with respect to the measurement of the stock of robots. |
| Keywords: | Automation, Industrial Robots, Demographic Change, Declining Fertility |
| JEL: | J11 O33 O40 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp315&r= |
| By: | Ofori, Pamela Efua; Grechyna, Daryna |
| 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. |
| JEL: | F4 F43 O4 |
| Date: | 2021–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:109696&r= |
| By: | Lin William Cong (Cornell University); Danxia Xie (Tsinghua University); Longtian Zhang (Central University of Finance and Economics) |
| Abstract: | We build an endogenous growth model with consumer-generated data as a new key factor for knowledge accumulation. Consumers balance between providing data for profit and potential privacy infringement. Intermediate good producers use data to innovate and contribute to the final good production, which fuels economic growth. Data are dynamically nonrival with flexible ownership while their production is endogenous and policy-dependent. Although a decentralized economy can grow at the same rate (but are at different levels) as the social optimum on the Balanced Growth Path, the R&D sector underemploys labor and overuses data -- an inefficiency mitigated by subsidizing innovators instead of direct data regulation. As a data economy emerges and matures, consumers' data provision endogenously declines after a transitional acceleration, allaying long-run privacy concerns but portending initial growth traps that call for interventions. |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2109.10028&r= |
| By: | Lin William Cong (Cornell University); Wenshi Wei (Tsinghua University); Danxia Xie (Tsinghua University); Longtian Zhang (Central University of Finance and Economics) |
| Abstract: | We model a dynamic data economy with fully endogenous growth where agents generate data from consumption and share them with innovation and production firms. Different from other productive factors such as labor or capital, data are nonrival in their uses across sectors which affect both the level and growth of economic outputs. Despite the vertical nonrivalry, the innovation sector dominates the production sector in data usage and contribution to growth because (i) data are dynamically nonrival and add to knowledge accumulation, and (ii) innovations "desensitize" raw data and enter production as knowledge, which allays consumers' privacy concerns. Data uses in both sectors interact to generate spillover of allocative distortion and exhibit an apparent substitutability due to labor's rivalry and complementarity with data. Consequently, growth rates under a social planner and a decentralized equilibrium differ, which is novel in the literature and has policy implications. Specifically, consumers' failure to fully internalize knowledge spillover when bearing privacy costs, combined with firms' market power, underprice data and inefficiently limit their supply, leading to underemployment in the innovation sector and a suboptimal long-run growth. Improving data usage efficiency is ineffective in mitigating the underutilization of data, but interventions in the data market and direct subsidies hold promises. |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2109.10027&r= |
| By: | Tomoo Kikuchi; Satoshi Tobe |
| Abstract: | We study the relationship between foreign debt and GDP growth using a panel dataset of 122 countries from 1980 to 2015. We find that economic growth correlates positively with foreign debt and that the relationship is causal in nature by using the sovereign credit default swap spread as an instrumental variable. Furthermore, we find that foreign debt increases investment and then GDP growth in subsequent years. Our findings suggest that sovereign default risks are responsible for "upstream" capital flows that contribute to GDP growth in OECD countries. |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2109.10517&r= |
| By: | Olatunji A. Shobande (University of Aberdeen, UK); Simplice A. Asongu (Yaoundé, Cameroon) |
| Abstract: | This study examines whether knowledge causes economic growth in Africa's two leading economies: Nigeria and South Africa. Using the Vector Autoregressive and Vector Error Correction approach, the findings show cointegration among the variables. The speed of convergence of the variables to their long-term mean values is relatively higher for South Africa than for Nigeria. In the short run, it is observed that knowledge unidirectionally Granger causes growth for Nigeria, whereas bidirectional causality is observed for South Africa. The higher correlation between knowledge and growth in South Africa reflects the success of greater investment in education. Nigeria must increase investment in education and modern infrastructure to converge to South Africa’s growth trajectory. Moreover, for Nigeria, (i) knowledge unidirectionally Granger cause growth, (ii) evidence of bidirectional causality flow is apparent between trade, the economic incentive and growth and (iii) health unidirectionally Granger cause knowledge. As for South Africa: (i) there is bidirectional causality between knowledge, trade openness and growth, whereas investment and economic incentive, unidirectionally Granger causes growth, (ii) investment, trade openness and health unidirectionally Granger cause knowledge and (iii) economic incentive unidirectionally Granger cause trade openness. In conclusion, this paper argues that a transformed education system can provide the knowledge base essential for promoting and sustaining economic growth. |
| Keywords: | Convergence; Growth performance; Knowledge-based economy; Nigeria; South Africa |
| JEL: | O10 O30 O38 O55 O57 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:21/059&r= |