nep-gro New Economics Papers
on Economic Growth
Issue of 2021‒11‒15
twelve papers chosen by
Marc Klemp
University of Copenhagen

  1. Borderline Disorder: (De facto) Historical Ethnic Borders and Contemporary Conflict in Africa By Emilio Depetris-Chauvin; Ömer Özak
  2. Testing Unified Growth Theory: Technological Progress and the Child Quantity--Quality Trade-off By Strulik, Holger
  3. The Long-run Gains from the Early Adoption of Electricity By Björn Brey
  4. Education, Fertility and Incomes in the States of India: Demographic Transition By Mandal, Abir; Regmi, Narendra; Tamura, Robert
  5. The Economic Effects of Immigration Restriction Policies - Evidence from the Italian Mass Migration to the US By Davide M. Coluccia; Lorenzo Spadavecchia
  6. The relationship between government debt and economic growth in South Africa with specific reference to Eskom By Zondi, Philani; Robinson, Zurika
  7. Technological Diffusion and Productivity Convergence across European Regions: A Spatial Approach over the Period 2000-2015 By Fabio Manca; Giuseppe Piroli
  8. Cross-Border Institutions and the Globalization of Innovation By Bian, Bo; Meier, Jean-Marie; Xu, Ting
  9. An Econometric Analysis of the Impact of Structural Changes on the Aggregate Output of the United States By Germinal G. Van
  10. Extraction path and sustainability By Bazhanov, Andrei
  11. Wealth and History: An Update By Daniel Waldenström
  12. Twofold Gendered Preferences in the Quantity-Quality Trade-Off Impact the Demographic Transition in Ethiopia By Boonaert, Eva; Hoyweghen, Kaat Van; Feyisa, Ashenafi Duguma; Goos, Peter; Maertens, Miet

  1. By: Emilio Depetris-Chauvin (Pontificia Universidad Católica de Chile); Ömer Özak (Southern Methodist University)
    Abstract: We explore the effect of historical ethnic borders on contemporary non-civil conflict in Africa. Exploiting variations across artificial regions (i.e., grids of 50x50km) within an ethnicity's historical homeland, we document that both the intensive and extensive margins of contemporary conflict are concentrated close to historical ethnic borders. Following a theory-based instrumental variable approach, which generates a plausibly exogenous ethno-spatial partition of Africa, we find that grid cells with historical ethnic borders have 27 percentage points higher probability of conflict and 7.9 percentage points higher probability of being the initial location of a conflict. We uncover several key underlying mechanisms: competition for agricultural land, population pressure, cultural similarity and weak property rights.
    Keywords: Borders, Conflict, Intra-State Conflict, Ethnic Borders, Non-Civil Conflict, Ethnic Conflict, Territory, Property Rights, Landownership, Population Pressure, Migration, Historical Homelands, Development, Africa, Economic Development, Economic Growth, Voronoi Diagram, Voronoi Tesselation, Thiessen Tesselation
    JEL: D74 N57 O13 O17 O43 P48 Q15 Q34
    Date: 2021–11
  2. By: Strulik, Holger
    JEL: O40
    Date: 2021
  3. By: Björn Brey
    Abstract: This paper explores the effect of the early adoption of technology on local economic development. While timing and intensity of technology adoption are key drivers of economic divergence across countries, the immediate impact of new technologies within advanced countries has been elusive. Resolving this puzzle, this paper documents that the early adoption of electricity across late 19th century Switzerland was conducive to local economic development not just in the short-run, but also in the long-run. Exploiting exogenous variation in the potential to produce electricity from waterpower combined with rapid changes in power generation and transmission technology the evidence presented can plausibly be interpretedas causal. The main mechanism through which differences in economic development persist is increased human capital accumulation and innovation, rather than persistent differences in the way electricity is used.
    Keywords: Electricity, Industrialization, Long-run development, Human capital
    Date: 2021–11
  4. By: Mandal, Abir; Regmi, Narendra; Tamura, Robert
    Abstract: Original decadal estimates of real output per worker, schooling per worker, mortality risk and total fertility rates for states of India covering 1951 to 2011 are produced. An intergenerational model with precautionary demand for fertility is used to fit the observations of fertility and schooling at the state level. The intergenerational human capital model is shown to explain about 75% of log level differences, 100% of average growth rates and 40\% of the variation of growth rates across the states of India. These are all improvements relative to a standard Mincer human capital model of schooling and experience returns. The data covers the demographic transition of the states of India from high fertility, total fertility rates of 6, to low fertility, total fertility rates of 2.5.
    Keywords: real output per worker, states of India, demographic transition
    JEL: O1 O4
    Date: 2021–10–11
  5. By: Davide M. Coluccia; Lorenzo Spadavecchia
    Abstract: This article studies the impact of immigration restriction policies on technology adoption in sending countries. From 1920 to 1921, the number of Italian immigrants to the United States dropped by 85% after Congress passed the Emergency Quota Act, a severely restrictive immigration law. In a difference-in-differences setting, we exploit variation in exposure across Italian districts to this massive restriction against human mobility. Using novel individual-level data on Italian immigrants to the US and newly digitized historical censuses, we show that this policy substantially hampered technology adoption and capital investment. We interpret this as evidence of directed technical adoption: an increase in the labor supply dampens the incentive for firms to adopt labor-saving technologies. To validate this mechanism, we show that more exposed districts display a sizable increase in overall population and employment in manufacturing. We provide evidence that “missing migrants,” whose migration was inhibited by the Act, drive this result.
    Keywords: age of mass migration, emigration, economic development, immigration barriers, technology adoption
    JEL: N14 N34 O15 O33
    Date: 2021
  6. By: Zondi, Philani; Robinson, Zurika
    Abstract: The increasing level of government debt continues to be one of the most contestable topics since the great recession due to its effect on growth; however, a consensus is yet to be achieved on the topic. The current study investigated the economic effects of deteriorating South African government debt for the period 1994 to 2019 with the application of the autoregressive distributed lag model by Pesaran et al. (1999), which generates efficient results in the presence of cointegration, yielding unbiased long-run estimates. In contrast to similar empirical studies, the analysis of Eskom?s output on growth was found to be crucial. The bounds test exhibited that the regressors were cointegrated in the long run. The results infer that in the short run, government debt has a positive but weak influence on the economic growth rate. Although negative in the long run, debt does not Granger-cause growth. The results also showed that Eskom?s output was negatively associated with economic growth in the long run and that government debt Granger-caused Eskom?s output level.
    Keywords: South Africa; Eskom; public debt; economic growth; ARDL and bound test
    Date: 2021–10
  7. By: Fabio Manca; Giuseppe Piroli
    Abstract: What are the drivers of growth and convergence in productivity at regional level? Differences in the stock of human capital across regions are hypothesized to be the major cause of differences in the speed by which following regions converge and catch-up with the most advanced ones. In addition, we test the role played by R&D expenditures and institutions exploiting a database covering European regions from 1995 to 2015, which includes regional total factor productivity (TFP) computed by the conventional residual approach. We find robust empirical evidence for these hypotheses in terms of both model specifications and sectoral disaggregation.
    Keywords: Regional Studies, European Regions, Catching-up, Total Factor Productivity
    JEL: P48 D24 J24 E02 C31 C33
    Date: 2021–10–07
  8. By: Bian, Bo; Meier, Jean-Marie; Xu, Ting
    Abstract: We identify strong cross-border institutions as a driver for the globalization of in-novation. Using 67 million patents from over 100 patent offices, we introduce novel measures of innovation diffusion and collaboration. Exploiting staggered bilateral in-vestment treaties as shocks to cross-border property rights and contract enforcement, we show that signatory countries increase technology adoption and sourcing from each other. They also increase R&D collaborations. These interactions result in techno-logical convergence. The effects are particularly strong for process innovation, and for countries that are technological laggards or have weak domestic institutions. Increased inter-firm rather than intra-firm foreign investment is the key channel.
    Keywords: Innovation,technology diffusion,globalization,cross-border institutions,bilateral investment treaties
    JEL: F21 F61 G18 G38 K33 O31 O33
    Date: 2021
  9. By: Germinal G. Van
    Abstract: Structural changes play an essential role in the economic development of a country. They represent the evolution of economic dynamics within the macroeconomy. As we know, the economic sectors of a country do not affect the whole economy equally and their level of output generates economic fluctuations. The purpose of this paper is to analyze the impact of the three major economic sectors on the aggregate production of the United States since the 1990s. This paper essentially argues that the service sector is the sector that has contributed the most to the development of the U.S. economy since the 2000s because technological progress increased the rapid changes in the structure of the macroeconomy. Through the use of several econometric methods, we aim to rigorously analyze how the economic policy of each sector impacted economic growth.
    Keywords: Econometrics, Economic Policy, Statistical Methods, Macroeconomics, Structural Change.
    JEL: C33 C49 E22 O43 N27
    Date: 2021–04–04
  10. By: Bazhanov, Andrei
    Abstract: This paper offers an approach to construct a family of extraction paths for nonrenewables that guarantee long-run sustainability of an imperfect economy. A path from this family leads to a monotonic growth of output with a decreasing rate of growth if a sustainability condition holds. Otherwise, the path leads either to a bounded decline or U-shaped path of output. In this sense, the paper extends neoclassical results and provides a bridge between neoclassical and degrowth theories because neoclassical tools are used to quantify degrowth scenarios. The offered path can be incentive-compatible for climate change problems because it reduces the extraction of polluting minerals consistently with the IPCC goals. That is, the climate-benefiting emission cuts by the parties of climate agreements may be guided by purely "egoistic" motives - to make own economies long-run sustainable.
    Keywords: natural nonrenewable resource; extraction policy; long-run sustainability; optimal degrowth
    JEL: Q01 Q32 Q35 Q38 Q54
    Date: 2021–10–23
  11. By: Daniel Waldenström
    Abstract: This paper analyzes new evidence on long-run trends in aggregate wealth accumulation and wealth inequality in Western countries. The new findings suggest that wealth-income ratios were lower before World War I than previously claimed, that wealth concentration fell over the past century and has remained low in Europe but increased in the United States, that wealth has changed from being dominated by elite-owned fortunes to consist mainly of popular wealth, and that capital shares in national income have been relatively stable over time, especially in the postwar era. These findings cast doubt on claims that a low-tax, low-regulation capitalism will generate extreme capital accumulation, and that persistent wealth equalization requires large shocks to capital coming from wars or progressive taxation. Instead, institutions that promote household wealth accumulation from below appear to be key for understanding the long-run evolution of wealth in Western societies.
    Keywords: wealth-income ratios, wealth inequality, capital share, economic history
    JEL: D30 E21 N30
    Date: 2021
  12. By: Boonaert, Eva; Hoyweghen, Kaat Van; Feyisa, Ashenafi Duguma; Goos, Peter; Maertens, Miet
    Keywords: Labor and Human Capital
    Date: 2021–08

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