nep-gro New Economics Papers
on Economic Growth
Issue of 2022‒02‒21
eight papers chosen by
Marc Klemp
University of Copenhagen

  1. From Neolithic Revolution to Industrialization By Chu, Angus C.
  2. Settlers and Norms By Joanne Haddad
  3. Beyond the male breadwinner: life-cycle living standards of intact and disrupted English working families, 1260-1850 By Horrell, Sara; Humphries, Jane; Weisdorf, Jacob
  4. Climate Change and Economic Activity: Evidence from U.S. States By Mohaddes, K.; Ng, R. N. C.; Pesaran, M. H.; Raissi, M.; Yang, J-C.
  5. Impatience to Consume and Population Growth in a Simple Agrarian Economy By Eirik S. Amundsen; Anders Skonhoft
  6. Inequality and growth: a review on a great open debate in economics By Enea Baselgia; Reto Foellmi
  7. The Theory of Efficient Growth By Van, Germinal G.
  8. Factor Income Distribution and Capital Accumulation in Peru, 1940-2019 By César Castillo-García

  1. By: Chu, Angus C.
    Abstract: This study develops a simple economic model for the evolution of the human society from hunting-gathering to agriculture and then an industrial economy. The human society evolves across these three stages as population grows. However, under endogenous population growth, the population may stop growing and never reach the next threshold. If it fails to reach the first threshold, then the population remains as hunter-gatherers. If it reaches the first threshold, then an agricultural society emerges. The Neolithic Revolution occurs under a low fertility cost, strong fertility preference, high agricultural productivity, and high labor supply. Then, if the population fails to reach the next threshold, the economy remains in an agricultural Malthusian trap and does not experience industrialization. Industrialization occurs under a low fertility cost, strong fertility preference, high agricultural productivity, high labor supply, a large amount of agricultural land, high industrial productivity, and a low fixed cost of industrial production.
    Keywords: Neolithic Revolution; industrialization; endogenous population growth
    JEL: J11 O13 O14
    Date: 2022–02
  2. By: Joanne Haddad
    Abstract: The distinctive traits of early settlers at initial stages of institutional development may be crucial for cultural formation. In 1973, the cultural geographer Wilbur Zelinsky postulated this in his doctrine of “first effective settlement”. There is however little empirical evidence supporting the role of early settlers in shaping culture over the long run. This paper tests this hypothesis by relating early settlers’ culture to within state variation in gender norms in the United States. I capture settlers’ culture using past female labor force participation, women’s suffrage, and financial rights at their place of origin. I document the distinctive characteristics of settlers’ populations and provide suggestive evidence in support of the transmission of gender norms across space and time. My results show that women’s labor supply is higher, in both the short and long run, in U.S. counties that historically hosted a larger settler population originating from places with favorable gender attitudes. My findings shed new light on the importance of the characteristics of immigrants and their place of origin for cultural formation in hosting societies.
    Keywords: female labor force participation, settlers, gender norms, cultural formation
    Date: 2022–01
  3. By: Horrell, Sara; Humphries, Jane; Weisdorf, Jacob
    Abstract: This article provides a novel framework within which to evaluate real household incomes of predominantly rural working families of various sizes and structures in England in the years 1260–1850. We reject ahistorical assumptions about complete reliance on men's wages and male breadwinning, moving closer to reality by including women and children's contributions to family incomes. Our empirical strategy benefits from recent estimates of men's annual earnings, so avoiding the need to gross up day rates using problematic assumptions about days worked, and from new data on women and children's wages and labour inputs. A family life-cycle approach which accommodates consumption smoothing through saving adds further breadth and realism. Moreover, the analysis embraces two historically common but often overlooked family types alternative to the traditional male-breadwinner model: one where the husband is missing having died or deserted, and one where the husband is present but unwilling or unable to find work. Our framework suggests living standards varied widely by family structure and dependency ratio. Incorporating detailed demographic data available for 1560 onward suggests that small and intact families enjoyed high and rising living standards after 1700, while large or disrupted families depended on child labour and poor relief until c. 1830. A broader perspective on family structures informs understanding of the chronology and nature of poverty and coping strategies.
    Keywords: child labour; consumption smoothing; costs-of-living; dependency ratio; life cycle; living standards; male breadwinner families; poor relief; prices; wages; CF18-0495
    JEL: J22 N13 O10
    Date: 2021–08–30
  4. By: Mohaddes, K.; Ng, R. N. C.; Pesaran, M. H.; Raissi, M.; Yang, J-C.
    Abstract: We investigate the long-term macroeconomic effects of climate change across 48 U.S. states over the period 1963-2016 using a novel econometric strategy which links deviations of temperature and precipitation (weather) from their long-term moving-average historical norms (climate) to various state-specific economic performance indicators at the aggregate and sectoral levels. We show that climate change has a long-lasting adverse impact on real output in various states and economic sectors, and on labour productivity and employment in the United States. Moreover, in contrast to most cross-country results, our within U.S. estimates tend to be asymmetrical with respect to deviations of climate variables (including precipitation) from their historical norms.
    Keywords: Climate change, economic growth, adaptation, United States
    JEL: C33 O40 O44 O51 Q51 Q54
    Date: 2022–01–21
  5. By: Eirik S. Amundsen (Department of Economics, University of Bergen; Department of Food and Resource Economics, University of Copenhagen); Anders Skonhoft (Department of Economics, Norwegian University of Science and Technology)
    Abstract: This paper studies the relationship between population size and the rate of time preference (RTP) in pre-capitalist subsistence agricultural communities. The RTP is reflected in the community´s propensity to invest in and maintain new arable land that may be considered as an inherent characteristic of the considered community. Using a Malthusian framework, we show how communities with a low RTP end up with a high steady-state subsistence population compared to communities with a high RTP. Furthermore, unsustainable “optimum population” sizes are identified where consumption per capita has a maximal value. Finally, the paper shows that the population growth rate may have no bearing on the resulting subsistence steady-state population size. A population with a higher growth rate only reaches the subsistence steady-state population size faster and have a lower maximal consumption per capita along the path to the subsistence level.
    Keywords: Population growth, Malthusian model, Rate of time preference
    JEL: O12 Q12
    Date: 2022–02
  6. By: Enea Baselgia; Reto Foellmi
    Abstract: What is the relationship between inequality and growth? This question has occupied and fascinated social scientists for more than a century. This article critically reviews the recent empirical and theoretical literature on the complex interplay between inequality and economic growth. Inequality might come in many forms: (top) incomes, wages, wealth, land, or opportunities. At the same time, growth performance could be measured as average growth rates, variability of growth, or the potential for growth to 'take off'.
    Keywords: Economic growth, Inequality, Redistribution, Evidence, review
    Date: 2022
  7. By: Van, Germinal G.
    Abstract: The main objective of this paper is to propose an analytical framework to examine the foundations of the theory of efficient growth. The theory of efficient growth is a newly developed theory based on the principles of the neoclassical framework. It argues that an economy grows efficiently under two conditions. First, that the public and the private sectors both perform independently from each other. Second, the sum of their independent performances reaches an equilibrium. This equilibrium determines the optimum point of economic growth, and this optimal point illustrates the efficiency of economic growth.
    Keywords: Economic Growth, Mathematical Economics, Economic Theory, Macroeconomics, Business Cycle, Fiscal Policy
    JEL: C60 E13 E6 E62
    Date: 2022–01–10
  8. By: César Castillo-García (Department of Economics, New School for Social Research)
    Abstract: A current problem with Latin American economies is the lack of long-run official statistical data for income shares. Nevertheless, several proposals attempt to present estimations to proxy the evolutionary patterns of income distribution in different countries of the region. This study focuses on the factor income distribution for the Peruvian economy. It aims to show time series for the wage, profit, and mixed-income shares for the period 1942-2019 as reconstructed in Castillo (2015). I also present a brief history of the Peruvian macroeconomic regimes. Hence, the evolution of the wage and profits shares relate to the structural transformations of the Peruvian economy and the impact of economic policy in the distributive cycles. The paper ends with the estimation of a Kaleckian model and evaluates the economic growth regime for different time periods. While the whole 1940-2019 is a wage-led growth regime, economic growth in the Neoliberal era 1990-2019 is profit-led because of Peruvian structural changes and 1990s adjustment policies.
    Date: 2022–02

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