nep-gro New Economics Papers
on Economic Growth
Issue of 2021‒10‒18
nine papers chosen by
Marc Klemp
University of Copenhagen

  1. The Industrial Revolution, an unintended consequence of self-defence? By Prados de la Escosura, Leandro
  2. Population Sorting and Human Capital Accumulation By Leonid V. Azarnert
  3. Effects of political institutions on the external debt-economic growth nexus in Africa By Nounamo, Yann; Asongu, Simplice; Njangang, Henri; Tadadjeu, Sosson
  4. Productivity Growth and Capital Deepening in the Fourth Industrial Revolution By Martin Fleming
  5. Pudding, plague and education: trade and human capital formation in an agrarian economy By Kammas, Pantelis; Sakalis, Argyris; Sarantides, Vassilis
  6. Causal Relationship between Economic Growth and Agricultural productivity in Sub Saharan Africa: A Panel Cointegration Approach By Ogundari, Kolawole
  7. Can Institutional Transplants Work? A Reassessment of the Evidence from Nineteenth-Century Prussia By Jeremy Edwards
  8. Test Scores and Economic Growth: Update and Extension By Heller-Sahlgren, Gabriel; Jordahl, Henrik
  9. Conflict Induced Technical Change in Colombian Agriculture: A Spatial Model of Violence and Agricultural Productivity By Iglesias Pinedo, Wilman J.; Rocha Junior, Adauto

  1. By: Prados de la Escosura, Leandro
    Abstract: This short paper examines Patrick O'Brien's bold reinterpretation of the British Industrial Revolution as a joint result of the expropriation of land by the landed aristocracy, abundant coal endowments, and the unintended consequences of self-defence, in the context of historical literature and contraposes it to evidence on long run growth and inequality and alternative narratives of British industrialisation. It concludes that, by neglecting the contribution of culture and institutions to incentivise investment and innovation, O'Brien lessens the role of the British Industrial Revolution for understanding modern economic growth.
    Keywords: Industrial Revolution; Britain; Mercantilist State; Agriculture; Coal; Growth; Inequality
    JEL: N13 N43 N53 O14 O47
    Date: 2021–10–05
  2. By: Leonid V. Azarnert
    Abstract: This article analyzes the effect of population sorting on economic growth. The analysis is performed in a two-region growth model with endogenous fertility, in which public knowledge spillovers from the more advanced core into children’s human capital accumulation function in the periphery are incorporated. I show how migration affects the inter-temporal evolution of human capital in each of the regions and the economy as a whole. I also discuss how public policy interventions can help increase the per-capita human capital levels, if free uncontrolled migration leads to a reduction in human capital accumulation.
    Keywords: migration, population sorting, knowledge spillovers, fertility, human capital, economic growth
    JEL: D30 J10 O15 O18
    Date: 2021
  3. By: Nounamo, Yann; Asongu, Simplice; Njangang, Henri; Tadadjeu, Sosson
    Abstract: The main contribution of this study is the determination of an endogenous threshold of institutional quality, beyond which external debt would affect economic growth differently. The focus is on 14 countries of the African Franc zone over the period 1985-2015. Based on the panel Smooth Threshold Regression model, the results reveal that the relationship between external debt and economic growth is based on institutional quality. It is found that the level of indebtedness at which the effect of external debt on economic growth becomes negative is higher in countries with lower levels of corruption and high levels of democracy. This means that poor institutional quality prevents a country from taking full advantage of its credit opportunities. Thus, the more countries become democratic, the more debt helps finance economic growth. These results are robust to sensitivity analysis and Generalized Method of Moments estimation.
    Keywords: external debt, political institutions, economic growth
    JEL: E00 O10
    Date: 2021–01
  4. By: Martin Fleming (The Productivity Institute, The University of Manchester)
    Keywords: industrial revolution, productivity, industry 4.0, capital deepening, technological innovation, creative destruction
    Date: 2021–09
  5. By: Kammas, Pantelis; Sakalis, Argyris; Sarantides, Vassilis
    Abstract: During the late 19th century, the increasing popularity of pudding in England, along with the outbreak of phylloxera plague in French vineyards had an unintended effect in the agrarian economy of Greece. In particular, these events escalated the international demand and production of currants in Greece during the 1870s, causing an unprecedented positive shock that was transmitted through trade in the agricultural population. Using novel data from historical archives, we explore how this exogenous event affected investment towards human capital. Consistent with expectations, in an agrarian economy that specializes in unskilled labour-intensive agricultural goods, this shock had a negative effect on human capital formation.
    Keywords: education; fertility; agriculture; international trad
    JEL: J24 N33 O15
    Date: 2021–10
  6. By: Ogundari, Kolawole
    Abstract: The study revisits the causal relationship between agricultural productivity and economic growth in sub-Saharan Africa. The analysis is based on the panel cointegration approach, estimated using the Pooled Mean Group (PMG) estimators. The study employs a cross-country balanced panel data covering 35 countries from 1981 to 2010. Per capita, gross domestic product is an indicator of economic growth, and the total factor productivity (TFP) index is an agricultural productivity indicator used in the study. The empirical results show the variables have a different integration order based on the unit root test, while evidence of a cointegration relationship among the variables exists. The estimated PMG shows that in the long and short-run, agricultural TFP has significant positive and negative effects on economic growth, respectively, in the study. There is no effect of economic growth on agricultural TFP either in the long and short run. While the causality test shows that agricultural TFP Granger causes economic growth in the long and short run, we found no evidence that economic growth Granger causes agricultural TFP in the short run except in the long run. These findings show that greater attention to improving agricultural TFP would increase economic growth in the region.
    Keywords: Economic Growth, Agricultural Productivity, Granger Causality, Panel data, Sub Saharan Africa
    JEL: O1 O13 Q11 Q18
    Date: 2021–10–14
  7. By: Jeremy Edwards
    Abstract: The institutional reforms France imposed in the parts of Germany it occupied in the late eighteenth and early nineteenth centuries are claimed to provide an example of successful externally-imposed institutional reforms. The most detailed study is that of Lecce and Ogliari (2019), who argue that the effectiveness of transplanted French institutions in different parts of Prussia depended on the cultural proximity between France and the relevant part of Prussia. However, Lecce and Ogliari take no account of a widely-recognized feature of nineteenth-century Prussian economic development: the importance of regional effects. The French reforms were concentrated in the west of Prussia, which was more economically advanced than the east before the French invasion, and this pre-existing difference must be disentangled from the effect of the French reforms in order to identify the effect of the latter. Once this is done, the evidence shows neither any favourable effect of French rule nor an effect of cultural proximity on the impact of French rule.
    Keywords: institutional reform, regional effects, omitted variable bias
    JEL: N13 O43 O52
    Date: 2021
  8. By: Heller-Sahlgren, Gabriel (Research Institute of Industrial Economics (IFN)); Jordahl, Henrik (Örebro University School of Business)
    Abstract: Research indicates that education quality – measured by test scores in international student surveys – predicts economic growth. In this paper, we extend previous findings up to 2016 and analyse test scores of upper-secondary school students only. We find that the positive relationship between growth and test scores holds in both cases. The share of top-performing students exhibits a stronger correlation with economic growth than does the share of students who meet basic requirements.
    Keywords: Education; Economic growth; PISA; TIMSS; Top-performing students
    JEL: I25 O15 O57
    Date: 2021–10–01
  9. By: Iglesias Pinedo, Wilman J.; Rocha Junior, Adauto
    Keywords: Production Economics, Community/Rural/Urban Development, Research Methods/Statistical Methods
    Date: 2021–08

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