nep-gro New Economics Papers
on Economic Growth
Issue of 2021‒11‒29
eight papers chosen by
Marc Klemp
University of Copenhagen

  1. Population Homeostasis in Sub-Saharan Africa By David De la Croix; Paula Eugenia Gobbi
  2. On Some Problems of Using the Human Development Index in Economic History By Nicola Amendola; Giacomo Gabbuti; Giovanni Vecchi
  3. The asymmetric effect of internet access on economic growth in sub-Saharan Africa By Idris A. Abdulqadir; Simplice A. Asongu
  4. The Emergence and Persistence of Oligarchy: A Dynamic Model of Endogenous Political Power By Ilwoo Hwang; Jee Seon Jeon
  5. Addressing our planetary crisis By Jim Falk; Faten Attig-Bahar; Rita R. Colwell; Swadhin K. Behera; Adel S. El-Beltagy; Joachim von Braun; Partha Dasgupta; Peter H. Gleick; Ryuichi Kaneko; Charles F. Kennel; Phoebe Koundouri; Yuan Tseh Lee; Thomas E. Lovejoy; Amy Luers; Cherry A. Murray; Rattan Lal; Ismail Serageldin; Youba Sokona; Kazuhiko Takeuchi; Makoto Taniguchi; Chiho Watanabe; Tetsuzo Yasunari
  6. Entrepreneurs “from within”? Schumpeter and the challenge of endogenizing novelty. By Remy Guichardaz; Julien Pénin
  7. Birds of a Feather: Life Cycle Social Externalities, Heterogeneous Beliefs, and Development Bias By Young-Chul Kim; Glenn C. Loury
  8. r minus g By Robert J. Barro

  1. By: David De la Croix; Paula Eugenia Gobbi
    Abstract: Global population growth remains one of the major challenges of the twenty-first century. This is particularly true for African countries which have been undergoing their demographic transitions. To investigate whether predicted increasing population density and urbanization can help to stabilize African population, we construct a database for 84 georeferenced Demographic and Health Survey (DHS) samples including 947,191 individuals in sub-Saharan Africa and match each location with gridded population density from NASA. We apply a proportional hazard model to evaluate the quantitative impact of local population density on the transitions from childlessness to motherhood, and from celibacy to marriage. Moving from the 5th to the 95th percentile of population density increases the median age at first birth by 2.2 years. This roughly decreases completed fertility by half a child. The same increase in population density increases the median age at first marriage by 3.3 years. These findings contribute to the understanding of why fertility has not dropped in Africa as fast as expected. One part of the answer is that population density remains low. Yet the total effect of increased density on fertility remains limited and counting on it to stabilize the population would be unrealistic.
    Keywords: Fertility, Homeostasis, Africa, Population densityeconomie de
    Date: 2021–11
  2. By: Nicola Amendola; Giacomo Gabbuti; Giovanni Vecchi
    Abstract: We argue against the use of composite indices, such as the Human Development Index (HDI), in economic history. We show that the HDI can be interpreted as a formal representation of the analyst's ethical system. We support our claim by introducing a new class of paternalistic social welfare functions (Graaff 1957, Mas-Colell, 1995) which encompasses all the HDI formulas put forth by the literature. The theoretical framework is illustrated by an empirical investigation of the long-run evolution of Italians' living standards and civic liberties. We conclude that any history based on composite indices is one where both data and history play a minor role, if any.
    Keywords: Human development index; economic wellbeing; composite indices; living standards; CES; social welfare functions; Italy.
    Date: 2021–11–18
  3. By: Idris A. Abdulqadir (Federal University Dutse, Dutse, Nigeria); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: This article investigates the asymmetric effect of internet access (index of the internet) on economic growth in 42 sub-Saharan African (SSA) countries over the period 2008-2018. The estimation procedure is obtained following a dynamic panel threshold regression technique via 1000 bootstrap replications and the 400 grids search developed by Hansen (1996, 1999, 2000). The investigation first explores the presence of inflection points in the relationship between internet access and economic growth through the application of Hansen's threshold models. The finding from the nonlinearity threshold model revealed a significant internet threshold-effect of 3.55 percent for growth. The article also examines the linear short-run effect of internet access on economic growth while controlling for the effects of private sector credit, trade openness, government regulation, and tariff regimes. The marginal effect of internet access is evaluated at the minimum, and the maximum levels of government regulation and tariffs regime are positive. On the other hand, the minimum and maximum levels of private sector credit and trade openness are negative via the interaction terms. The article advances the literature by its nonlinear transformation of the relevance of internet access on economic growth by exploring interactive mechanisms of: internet access versus financial resource, internet access versus trade, internet access versus government regulation, and internet access versus the tariff regimes from end-user subscriptions. In policy terms, the statistical significance of the joint impact of government regulations and tariff regimes is relevant in the operation of the telecommunication industry in SSA countries.
    Keywords: Internet access; economic growth; government regulations; trade openness; tariff regimes; sub-Saharan Africa
    Date: 2021–01
  4. By: Ilwoo Hwang; Jee Seon Jeon
    Abstract: We study an infinite-horizon multilateral bargaining game in which the status quo policy, players¡¯ recognition probabilities, and their voting weights are endogenously determined by the previous bargaining outcome. With players not discounting future payoffs, we show that the long-run equilibrium outcome features the concentration of power by one or two players, depending on the initial bargaining state. If the players¡¯ initial shares are relatively equal, they successfully prevent tyranny, but a two-player oligarchy nevertheless emerges and persists. The same results are obtained with payoff discounting, provided that the players¡¯ shares are not too small. Our results highlight the importance of the initial power distribution and discounting of future payoffs in the long-run development of power configuration.
    Keywords: Dynamic bargaining; Endogenous political power; Endogenous institution; Markov perfect equilibrium, Oligarchy;
    Date: 2021–11
  5. By: Jim Falk; Faten Attig-Bahar; Rita R. Colwell; Swadhin K. Behera; Adel S. El-Beltagy; Joachim von Braun; Partha Dasgupta; Peter H. Gleick; Ryuichi Kaneko; Charles F. Kennel; Phoebe Koundouri; Yuan Tseh Lee; Thomas E. Lovejoy; Amy Luers; Cherry A. Murray; Rattan Lal; Ismail Serageldin; Youba Sokona; Kazuhiko Takeuchi; Makoto Taniguchi; Chiho Watanabe; Tetsuzo Yasunari
    Keywords: Climate change, Biodiversity, Population growth, Risk interaction
    Date: 2021–11–22
  6. By: Remy Guichardaz; Julien Pénin
    Abstract: The development of a dynamic model of endogenous economic change was a major challenge for Schumpeter throughout his academic career. With regard to this life-long objective, this work provides an explanation of why it was impossible for Schumpeter to offer a convincing endogenous theory of the emergence of novelty. We show that Schumpeter’s view of the apparition of pure novelty is centered around an individual and elitist dimension of entrepreneurship and an energetic and vitalist axiom of social change, which is by nature hardly compatible with endogenous evolution. Furthermore, our revisiting of the last writings of Schumpeter shows that, when it comes to the issue of the emergence of pure novelty, the impossibility persisted until his death. Contrary to the claim of some commentators, even the old Schumpeter remained stuck into an individualistic, elitist and energetic view of the generation of pure novelty.
    Keywords: Schumpeter; entrepreneur; economic evolution; endogenous change; innovation.
    JEL: B15 O3
    Date: 2021
  7. By: Young-Chul Kim (Department of Economics, Sogang University, Korea); Glenn C. Loury (Department of Economics, Brown University, USA)
    Abstract: This study models how social networks that span an individual’s entire life cycle affect human capital acquisition and subsequent employment outcomes. Early-life social affiliations can affect the cost of human capital, while later-life connections can affect the earnings derived from previously acquired human capital. The dynamic interactions between early-life network-mediated investments and later-life networkmediated returns give rise to multiple, fully consistent, rational expectations equilibria. These self-fulling expectations imply development bias, wherein heterogeneous beliefs about the future persistently generate unequal outcomes among social groups. When the model is applied to a country’s development cycle, the theoretical findings suggest that, while between-group inequality can reduce economic growth in a mature economy, it may increase growth in an economy in the initial stages of its development. Relevant historical examples of between-group dynamics are discussed extensively.
    Keywords: Group Inequality, Social Externality, Development Bias, Expectation Trap
    JEL: I30 J15 Z13
    Date: 2021
  8. By: Robert J. Barro (American Enterprise Institute)
    Abstract: Long-term data show that the dynamic efficiency condition r>g holds when g is represented by the average growth rate of real GDP if r is the average real rate of return on equity, E(re ), but not if r is the risk-free rate, rf .
    Keywords: Economic Growth, Economic Risk, Economics, Gross Domestic Product (GDP)
    JEL: A
    Date: 2020–10

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