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on Economic Growth |
| By: | Burgess, Matthew G.; Langendorf, Ryan E.; Moyer, Jonathan D.; Dancer, Ashley; Hughes, Barry B.; Tilman, David |
| Abstract: | Long-run economic growth is deeply uncertain, but will profoundly affect societal scale, well-being, and challenges. Statistical forecasts, expert opinions, and socioeconomic scenarios from integrated assessment models (IAMs) project an order-of-magnitude range of 2100 global GDP per capita values, with an even wider range for today’s developing countries. Definitive multidecadal predictions are impossible, but here we show that a long-standing historical relationship between GDP per capita growth and GDP per capita is most consistent with 21st-century scenarios projecting relatively slow economic growth and high inequality, though still projecting rising affluence in all regions. We show that a simple differential equation-based model that empirically fits this relationship to a Kuznets curve would have, since 1980, consistently projected a 21st-century economic future similar to the Shared Socioeconomic Pathway (SSP) scenario SSP4. Moreover, we show that the Kuznets model’s projections from 1980 onwards would have consistently outperformed short-term IMF forecasts for the 2010s, except in low-income regions, where both tend to over-project growth. We show that a complex empirically grounded IAM (International Futures, IFs) produces nearly identical 21st-century GDP per capita projections as the Kuznets model. Compared to the SSP scenarios, the IFs model projects a 21st century with relatively high poverty and population growth, and moderate energy demands and GHG emissions. |
| Date: | 2022–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:q4uc6&r= |
| By: | Germinal G. Van |
| Abstract: | The 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: | E62 O42 O43 R13 |
| Date: | 2022–03–09 |
| URL: | http://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2022_09&r= |
| By: | Philipp Lieberknecht; Philip Vermeulen |
| Abstract: | This paper analyses the joint long-run evolution of wealth and income inequality. We show that top wealth and income shares were cointegrated over the past century in France and the US. We rationalise this finding using a two-agent version of the Solow growth model. In this framework, the co-movement of top wealth and income shares is determined by the relative saving rate at the top, i.e. the ratio of the saving rate of rich individuals to the aggregate saving rate. The cointegration finding suggests that relative saving rates at the top are fairly stable over time, thus explaining the tight co-movement between top wealth and income shares over the past century. |
| Keywords: | Income inequality, wealth inequality, top shares, saving rates, cointegration, error correction. |
| JEL: | D31 E21 E25 N32 N34 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2022-37&r= |
| By: | Ziesemer, Thomas (UNU-MERIT, Maastricht University) |
| Abstract: | In an empirical, dynamic simultaneous equation model (DSEM) for Brazil with 22 equations and variables, we show that foreign income is a driver of economic growth besides semi-endogenous technical change. With a balance-of-payments constraint and endogenous terms of trade, the major mechanism is (i) world GDP driving exports, (ii) exports paying for imported capital goods, which (iii) enter a production function increasing output and the foreign-debt/GDP ratio and (iv) increase the endogenous labour force, and (v) slightly reduce human capital growth. Permanent increases of human capital increase the R&D/GDP ratio, labour-augmenting productivity, and GDP. A policy to increase the R&D/GDP ratio leads to more human capital, labour productivity and GDP levels. Both knowledge policies reduce the debt/GDP ratio. A lasting shock on the terms of trade reveals that there is no Harberger-Laursen-Metzler effect. The results hold in the presence of endogenous terms of trade, foreign debt, net foreign income, and net current transfers from abroad, and non-Walrasian (dis-)equilibrium variables: inflation and changing inventories for the goods market, and unemployment in the labour market. Policy should strengthen the weak link from R&D to technical change and make education more attractive. |
| Keywords: | dynamic simultaneous equation model, balance-of-payments, constrained growth, imported capital goods, foreign debt, human capital, R&D |
| JEL: | F43 O11 O41 O47 O54 |
| Date: | 2022–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2022013&r= |
| By: | Manuel Ennes Ferreira; João Dias; Jelson Serafim |
| Abstract: | We assessed the impact of stock market development on growth in Africa. It uses annual data from a panel of 9 countries in Africa over the period 1992–2017. Panel Vector Autoregressive econometrics technique is used in data analysis. Our main findings are that stock market development has a positive effect on economic growth. Investment, human capital, and openness also positively influence economic growth in Africa. The inflation and government expenditure affect economic growth negatively. The paper also finds that using the impulse response function, economic growth reacts to the stock market for 8 years and goes back to the initial level. |
| Keywords: | Stock market, Economic growth, Panel vector autoregressive |
| JEL: | G00 O16 C23 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp02282022&r= |
| By: | Felix Bracht; Dennis Verhoeven |
| Abstract: | Existing estimates of the economic costs of air pollution do not account for its effect on inventive output. Using two weather phenomena as instruments, we estimate this effect in a sample of 1,288 European regions. A decrease in exposure to small particulate matter of 0.17µg/m3 - the average yearly reduction in Europe - leads to 1.7% more patented inventions. After ruling out reallocation of human capital, inventor mortality and R&D expenditures as drivers of the effect, we conclude that air pollution's harm to economic output increases by at least 10% when accounting for innovation. |
| Keywords: | air pollution, air quality, innovation, patent, productivity |
| Date: | 2021–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1817&r= |
| By: | Luis Bosshart; Jeremiah Dittmar |
| Abstract: | We document how the Black Death activated politics and led to economic divergence within Europe. Before the pandemic, economic development was similar in Eastern and Western German cities despite greater political fragmentation in the West. The pandemic precipitated a divergence that coincided with prior differences in politics. After the pandemic, construction and manufacturing fell by 1/3 in the East relative to underlying trends and the Western path. Politics institutionalizing local self-government advanced in the West, but not in the East. This divergence is observed across otherwise similar cities along historic borders and foreshadows a subsequent divergence in agriculture. |
| Keywords: | institutions, political economy, structural change, cities, growth |
| Date: | 2021–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1805&r= |
| By: | Huntington, Hillard G.; Liddle, Brantley |
| Abstract: | New fears about escalating fuel prices and accumulating inflation are raising concerns about the possible dimming of near-term prospects for world economic growth. The role of energy prices in shaping economic growth relates not only to geopolitical risks or environmental taxes but also to a range of strategies that place moratoria on primary energy sources like nuclear, coal, petroleum, and natural gas. Applying a new data set for country-level energy prices since 1960, this study evaluates the effects of energy prices on economic growth in 18 OECD countries by controlling for other important macroeconomic conditions that shape economic activity. Mean-group estimates that control for cross-country correlations are used to emphasize average responses across nations. Averaged across all nations, results suggest that a 10 percent increase in energy prices dampened economic growth by about 0.15 percent. Moreover, some evidence exists that this response may be larger for more energy-intensive economies. |
| Keywords: | OECD economic growth; energy prices; cross-country panel analysis |
| JEL: | C23 O47 Q43 Q54 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:113040&r= |
| By: | Aidt, T.; Lacroix, J.; Meonx, P-E. |
| Abstract: | This paper studies a new mechanism that allows political elites from a non-democratic regime to survive a democratic transition: connections. We document this mechanism in the transition from the Vichy regime to democracy in post-World War II France. The parliamentarians who had supported the Vichy regime were purged in a two-stage process where each case was judged twice by two different courts. Using a difference-in-differences strategy, we show that Law graduates, a powerful social group in French politics with strong connections to one of the two courts, had a clearance rate that was 10 percentage points higher than others. This facilitated the persistence of that elite group. A systematic analysis of 17,589 documents from the defendants' dossiers is consistent with the hypothesis that the connections of Law graduates to one of the two courts were a major driver of their ability to avoid the purge. We consider and rule out alternative mechanisms. |
| Keywords: | Purges, Political transitions, Elite persistence, Connections |
| JEL: | D73 K40 N44 P48 |
| Date: | 2022–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2232&r= |
| By: | De Juan Fernández, Aránzazu; Poncela, Pilar; Rodríguez Caballero, Carlos Vladimir; Ruiz Ortega, Esther |
| Abstract: | In this paper,we surve yrecent econometric contributions t omeasure the relationship between economic activity and climate change.Due to the critical relevance of these effectsfor the well-being of future generations,there is an explosion of publications devoted to measuring this relationship and its main channels.The relation between economic activity andclimate change is complex with the possibility of causality running in both directions. Starting from economic activity,the channels that relate economic activity and climate changeare energy consumption and the consequent pollution. Hence, we first describe the main econometric contributions about the interactions between economic activity and energy consumption, moving then to describing the contributions on the interactions between economicactivity and pollution. Finally, we look at the main results on the relationship between climate change and economic activity. An important consequence of climate change is the increasing occurrence of extreme weather phenomena. Therefore,we also survey contributions on the economice effects of catastrophic climate phenomena. |
| Keywords: | Catastrophic Weather; Energy Consumption; Environmental Kuznets Curve; Global Warming; Greenhouse Gases; Temperature Trends |
| Date: | 2022–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:cte:wsrepe:35044&r= |