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on Economic Growth |
| By: | Matteo Lanzafame |
| Abstract: | This paper provides estimates of the impact of demographic change on labor productivity growth, relying on annual data over 1961-2018 for a panel of 90 advanced and emerging economies. We find that increases in both the young and old population shares have significantly negative effects on labor productivity growth, working via various channels - including physical and human capital accumulation. Splitting the analysis for advanced and emerging economies shows that population ageing has a greater effect on emerging economies than on advanced economies. Extending the benchmark model to include a proxy for the robotization of production, we find evidence indicating that automation reduces the negative effects of unfavorable demographic change - in particular, population aging - on labor productivity growth. |
| Keywords: | Demographic change; labor productivity; robots. |
| JEL: | C33 J11 O40 |
| Date: | 2022–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2022_03&r= |
| By: | Omang Ombolo Messono (University of Douala, Douala, Cameroon); Simplice A. Asongu (Yaoundé, Cameroon); Vanessa S. Tchamyou (Yaoundé, Cameroon) |
| Abstract: | This study examines the effects of the historical prevalence of infectious diseases on contemporary gender equality. Previous studies reveal the persistence of the effects of historical diseases on innovation, through the channel of culture. Drawing on the Parasite-Stress Theory, we propose a framework which argues that historical prevalence of infectious disease reduces contemporary gender equality. Using Ordinary Least Squares (OLS) and Two Stage Least Squares (2SLS) in a cross-section with data from 122 countries between 2000 and 2021, we provide support for the underlying hypothesis. Past diseases reduce gender equality both directly and indirectly. The strongest indirect effects occur through innovation output. Gender equality analysis may take these findings into account and incorporate disease pathogens into the design of international social policy. |
| Keywords: | infectious diseases; gender equality; economic development |
| JEL: | B15 B40 B54 I31 J24 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:22/027&r= |
| By: | Ellora Derenoncourt; Chi Hyun Kim; Moritz Kuhn; Moritz Schularick |
| Abstract: | The racial wealth gap is the largest of the economic disparities between Black and white Americans, with a white-to-Black per capita wealth ratio of 6 to 1. It is also among the most persistent. In this paper, we construct the first continuous series on white-to-Black per capita wealth ratios from 1860 to 2020, drawing on historical census data, early state tax records, and historical waves of the Survey of Consumer Finances, among other sources. Incorporating these data into a parsimonious model of wealth accumulation for each racial group, we document the role played by initial conditions, income growth, savings behavior, and capital returns in the evolution of the gap. Given vastly different starting conditions under slavery, racial wealth convergence would remain a distant scenario, even if wealth-accumulating conditions had been equal across the two groups since Emancipation. Relative to this equal-conditions benchmark, we find that observed convergence has followed an even slower path over the last 150 years, with convergence stalling after 1950. Since the 1980s, the wealth gap has widened again as capital gains have predominantly benefited white households, and income convergence has stopped. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9774&r= |
| By: | Bofinger, Peter; Geißendörfer, Lisa; Haas, Thomas; Mayer, Fabian |
| Abstract: | Joseph A. Schumpeter is one of the most famous economists of the 20th century and the 'patron saint' of the finance and growth literature. We have discovered that the prevailing literature has, however, misinterpreted Schumpeter, which leads to puzzling empirical results and difficulties in explaining even fundamental relationships. We argue that this is due to a misrepresentation of the role of banks and liquidity creation and the role of household saving. After a critical discussion of the literature, we provide our own empirical analysis using a panel of 43 countries to explore the relationships between the important variables of the finance and growth literature. Our empirical analysis above all supports Schumpeter's view that credit growth supports GDP growth while saving is irrelevant for credit growth and GDP growth. In sum, a correct interpretation of Schumpeter helps to overcome the theoretical and empirical challenges which confront the prevailing literature. |
| Keywords: | Finance-growth nexus,Finance,Financial development,Economic growth,Economic development,Financial intermediation,Bank credit,Liquidity creation,Saving |
| JEL: | B20 B22 C10 E44 F30 F43 G21 O11 O16 O4 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wuewep:102&r= |
| By: | Lucas Menescal; José Alves |
| Abstract: | In this empirical study we assess both linear and nonlinear relationship between total taxation and several tax items with real per capita GDP growth rates for 43 developing countries between 1990 and 2019. We use panel data techniques to evaluate the effects of taxation on economic growth for both short and long run perspectives, and to find optimal tax threshold values. We obtain evidence of nonlinear relationships between all tax items, except for corporate income taxation, as well as an optimal value for total tax burden around 23,5% of GDP for the whole sample. When the sample is subdivided by countries’ income levels, we find threshold values for all tax items and an optimal tax burden around 23,6% of GDP for high income countries and 21,3% of GDP for low income. Our results provide support regarding the existence of nonlinearities and about policies focused on raising certain tax revenues, as a percentage of GDP, without hampering economic growth. |
| Keywords: | Economic Growth; Fiscal Policy; Optimal taxation; Tax thresholds |
| JEL: | E62 H21 O47 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp02322022&r= |
| By: | Kirill Borissov (European University at St.Petersburg, Russia); Mikhail Pakhnin (European University at St.Petersburg, Russia); Ronald Wendner (University of Graz, Austria) |
| Abstract: | We consider a neoclassical growth model with quasi-hyperbolic discounting under Kantian optimization: each temporal self acts in a way that they would like every future self to act. We introduce the notion of a Kantian policy as an outcome of Kantian optimization in a given class of policies. We derive and characterize a Kantian policy in the class of policies with a constant saving rate for an economy with log-utility and Cobb--Douglas production technology and an economy with isoelastic utility and linear production technology. In all cases, the Kantian saving rate is higher than the saving rate of sophisticated agents, and a Kantian path Pareto dominates a sophisticated path. |
| Keywords: | Quasi-hyperbolic discounting; time inconsistency; kantian equilibrium; sophisticated agents; saving rate; welfare. |
| JEL: | C70 D15 D91 E21 O40 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:grz:wpaper:2022-03&r= |
| By: | Antonio Ciccone; Jan Nimczik |
| Abstract: | After the end of World War II in 1945, millions of refugees arrived in what in 1949 became the Federal Republic of Germany. We examine their effect on today’s productivity, wages, income, rents, education, and population density at the municipality level. Our identification strategy is based on a spatial discontinuity in refugee settlement at the border between the French and US occupation zones in the South-West of post-war Germany. These occupation zones were established in 1945 and dissolved in 1949. The spatial discontinuity arose because the US zone admitted refugees during the 1945-1949 occupation period whereas the French zone restricted access. By 1950, refugee settlement had raised population density on the former US side of the 1945-1949 border significantly above density on the former French side. Before the war, there never had been significant differences in population density. The higher density on the former US side persists entirely in 2020 and coincides with higher rents as well as higher productivity, wages, and education levels. We examine whether today’s economic differences across the former border are the result of the difference in refugee admission; the legacy of other policy differences between the 1945-1949 occupation zones; or the consequence of socio-economic differences predating WWII. Taken together, our results indicate that today’s economic differences are the result of agglomeration effects triggered by the arrival of refugees in the former US zone. We estimate that exposure to the arrival of refugees raised income per capita by around 13% and hourly wages by around 10%. |
| Keywords: | Immigration, productivity, wages, refugees, long-run effects |
| JEL: | O4 O11 R11 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1165&r= |
| By: | Jan Weber, Jan Schulz |
| Abstract: | We document two novel stylized facts on European integration and cohesion. First, we show that the interregional income distribution, measured as GDP per capita at the NUTS-3 level, is bimodal for all considered years. Second, we demonstrate that this mixture of two log-normal distributions provides an excellent fit for this interregional distribution in all considered years. We put forward two meso-level interpretations of these stylized facts, based on heterodox growth theory: The log-normality of the individual clusters hints at a stochastically multiplicative process, where growth is strongly path-dependent. This can be derived from maximum entropy considerations. However, the bimodality in the income distributions also implies two separate growth mechanisms. We show that the high-variance log-normal distribution governs the dynamics at both tails of the income distribution, which might be interpreted as the core and periphery and the low-variance variant the bulk of the distribution, thus interpretable as a semi-periphery. |
| Keywords: | Inequality; Europe; Maximum Entropy; Geometric Brownian Motion; Core; Periphery; Resilience JEL Classification: C46, D63, F15, F43, C14, C63 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:uta:papers:2022_01&r= |
| By: | Obikili, Nonso |
| Abstract: | This paper examines the link between historical political fragmentation and surplus agricultural production, and the impact of natural endowments with regards to crop suitability. I show that in sub-Saharan Africa, groups that cultivated tubers, specifically yams, were more likely to have higher levels of local political fragmentation. I show that both tubers and most cereals were positively correlated with historic population density and that there was no historic discrimination in the capacity of crops to produce surpluses and support large populations. I however show that unlike cereal cultivators who were more likely to be centralized, tuber cultivators were likely to have more local political fragmentation. I use crop suitability and the proximity to the area of the domestication of yams to show that cultivating yams did lead to more local political fragmentation. I argue that this is likely due to the biological properties of yams which make them more difficult to expropriate and implies that surpluses stay local. I argue that the experience of keeping surpluses local is associated with contemporary social norms that are against autocracy and unitary accumulation of power. These social norms are an example of the mechanism through which these historical institutional structures transmit to contemporary times. |
| Keywords: | Political Fragmentation; Agriculture; Social Norms; Africa |
| JEL: | D72 N47 N57 O10 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:113201&r= |
| By: | GANIO-MEGO, Joe |
| Abstract: | The Preston curve has been plotted using historical GDP PC data from the Angus Maddison historical databases. Those databases have values of the human world population and corresponding GDP at PPP going from the year 0 CE to 2020 CE. By plotting the Preston curves with historical data, the typical allometric quarter-power relation between lifespan and body mass came out, where body mass was substituted by GDP PC. Then the Preston curve was plotted classically, with yearly (instant) data, and in this case, the allometric 0.15 power relation came out. The power of 0.15 is typical relation between body mass and maximal lifespan potential of many living species. It is too early to find scientific reasons for these facts, but they are worthy of further investigation. |
| Date: | 2022–05–25 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:y8rbt&r= |
| By: | Ralph Hippe (EU agency Cedefop, Thessaloniki, Greece); Damien Demailly (Institute for Climate Economics (I4CE), Paris, France.); Claude Diebolt (BETA/CNRS (UMR 7522), University of Strasbourg, 61 avenue de la Forêt Noire, France) |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:afc:wpaper:05-22&r= |
| By: | James Kai-sing Kung (The University of Hong Kong); Ömer Özak (Southern Methodist University); Louis Putterman (Brown University); Shuang Shi (The University of Hong Kong) |
| Abstract: | We propose and test empirically a theory describing the endogenous formation and persistence of mega-states, using China as an example. We suggest that the relative timing of the emergence of agricultural societies, and their distance from each other, set off a race between their autochthonous state-building projects, which determines their extent and persistence. Using a novel dataset describing the historical presence of Chinese states, prehistoric development, the diffusion of agriculture, and migratory distance across 1-degree x 1-degree grid cells in eastern Asia, we find that cells that adopted agriculture earlier and were close to Erlitou -- the earliest political center in eastern Asia -- remained under Chinese control for longer and continue to be a part of China today. By contrast, cells that adopted agriculture early and were located further from Erlitou developed into independent states, as agriculture provided the fertile ground for state-formation, while isolation provided time for them to develop and confront the expanding Chinese empire. Our study sheds important light on why eastern Asia kept reproducing a mega-state in the area that became China and on the determinants of its borders with other states. |
| Keywords: | Comparative Development, State-Building, Emergence of States, Agricultural Adoption, Isolation, Neolithic Revolution, Social Complexity, East Asia, China, Erlitou |
| JEL: | F50 F59 H70 H79 N90 O10 R10 Z10 Z13 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:smu:ecowpa:2202&r= |