nep-gro New Economics Papers
on Economic Growth
Issue of 2023‒03‒13
six papers chosen by
Marc Klemp
University of Copenhagen

  1. The Impact of Industrialization on Secondary Schooling during the Industrial Revolution: Evidence from 19th Century France By Raphaël Franck
  2. Competing Social Influence in Contested Diffusion: Luther, Erasmus and the Spread of the Protestant Reformation By Sascha O. Becker; Steven Pfaff; Yuan Hsiao; Jared Rubin
  3. Dynamic Tax Evasion and Growth with Heterogeneous Agents By Francesco Menoncin; Andrea Modena
  4. Test scores and economic growth: update and extension By Heller-Sahlgren, Gabriel; Jordahl, Henrik
  5. The determinants of economic institutions and the knock-on effects on GDP per capita By Castro Souza Junior, Jose Ronaldo; Gross, Daniel; Figueiredo, Lizia
  6. AK Type Production Function in DSGE Model By Masaya Yasuoka; Minoru Hayashida; Ryoichi Namba; Hiroyuki Ono

  1. By: Raphaël Franck
    Abstract: This study explores the impact of industrialization on secondary schooling in 19th century France. As a source of exogenous variation in industrialization across the French territory, it takes advantage of the openings and closures of mines which were supervised by the Ministry of Public Works, independently from the Ministry of Education. The results suggest that industrialization had a negative but mostly insignificant effect on high-school enrollment. However, industrialization increased the share of high-school pupils in applied sections and the wages of mathematics teachers.
    Keywords: horse power, industrial revolution, secondary schooling
    JEL: I25 N33 O14
    Date: 2023
  2. By: Sascha O. Becker (Monash University and University of Warwick); Steven Pfaff (University of Washington); Yuan Hsiao (University of Washington); Jared Rubin (Chapman University)
    Abstract: The spread of radical institutional change does not often result from onesided pro-innovation influence; countervailing influence networks in support of the status quo can suppress adoption. We develop a model of multiple and competing network diffusion. To apply the contesteddiffusion model to real data, we look at the contest between Martin Luther and Desiderius Erasmus, the two most influential intellectuals of early 16th-century Central Europe. Whereas Luther championed a radical reform of the Western Church that broke with Rome, Erasmus opposed him, stressing the unity of the Church. In the early phase of the Reformation, these two figures utilized influence networks of followers, affecting which cities in the Holy Roman Empire adopted reform. Using newly digitalized data on both leaders’ correspondence networks, their travels, the dispersion of their followers, and parallel processes of exchange among places through trade routes, we employ econometric tests and network simulations to test our theoretical model. We find that Luther’s network is strongly associated with the spread of the Reformation and that Erasmus’s network is associated with the stifling of the Reformation. This is consistent with a “fire-fighting†mechanism of contested diffusion, whereby the countervailing force suppresses innovations only after they have begun to spread.
    Keywords: contested diffusion; multiplex networks; correspondence networks; Protestant Reformation
    JEL: D85 N33 Z12 Z13
    Date: 2023
  3. By: Francesco Menoncin; Andrea Modena
    Abstract: We develop a tractable model of a production economy in which public capital improves aggregate productivity and the taxpayers have heterogeneous evasion opportunities. We show that, by issuing bonds, compliant taxpayers supply the evaders with an instrument to hedge against auditing risks, thereby expanding their evasion capacity. Moreover, we demonstrate that a higher share of tax evaders reduces the economy’s total factor productivity but has a hump-shaped relationship with the growth rate of aggregate capital.
    Keywords: Dynamic tax evasion; general equilibrium; growth; heterogeneous agents
    JEL: E20 G11 H26
    Date: 2023–02
  4. By: Heller-Sahlgren, Gabriel; Jordahl, Henrik
    Abstract: Research indicates that education quality–measured by test scores in international student surveys–predicts economic growth. In this paper, we extend previous findings up to 2016 and analyse test scores of upper-secondary school students only. We find that the positive relationship between growth and test scores holds in both cases. The share of top-performing students exhibits a stronger correlation with economic growth than does the share of students who meet basic requirements.
    Keywords: economic growth; education; PISA; TIMSS; top-performing students
    JEL: J1
    Date: 2023–01–19
  5. By: Castro Souza Junior, Jose Ronaldo; Gross, Daniel; Figueiredo, Lizia
    Abstract: There have been only a small number of empirical studies assessing the determinants of economic institutions despite the development of several notable theories regarding their origins and their impact on economic development. In this article, we identify the key determinants of economic institutions highlighted in the theoretical literature and select empirical proxies that best represent them while also ensuring as large a sample of countries as possible. With economic institutions as the dependent variable, we use a dynamic panel data model which allows us to deal with endogeneity problems. Our results indicate that democratic political institutions, years of schooling and political regime duration have a positive and statistically significant effect, and income inequality has a negative and statistically significant effect on the quality of economic institutions. Our main results are robust to removing certain groups of countries from the sample. We also use an interaction term to evaluate if regime duration has a stronger effect on the quality of economic institutions in autocracies than democracies, however the results we found are not robust to the two democratic political institutions data sources used in this paper. In the second part of the article, we use the same dynamic panel data model but with GDP per capita as the dependent variable. When we control for the quality of economic institutions, the association between democratic political institutions and GDP per capita switches from positive to negative. This and other evidence support our hypothesis that democratic political institutions have a positive indirect effect on per capita income via economic institutions.
    Keywords: economic institutions; political institutions; law and economics
    JEL: C5 K1 O1
    Date: 2023–01–09
  6. By: Masaya Yasuoka (Kwansei Gakuin University); Minoru Hayashida (The University of Kitakyushu); Ryoichi Namba (Chubu Region Institute for Social and Economic Research); Hiroyuki Ono (Toyo University)
    Abstract: Some DSGE (Dynamic Stochastic General Equilibrium) models include no consideration of long-run economic growth. Our paper presents consideration of a DSGE model with economic growth in the long run. As shown by the data, economic growth continues in terms of a long span. Therefore, we consider that it is appropriate to examine short-run and long-run policy effects on macroeconomic variables in a model in which long-run economic growth continues. The contribution represented by our paper is the description of the simple endogenous growth DSGE model. Although there exist some related papers about endogenous growth DSGE models, our setting is a very simple DSGE model, showing the ease of setting a DSGE model with endogenous growth.
    Keywords: DSGE model, Endogenous growth
    JEL: E60
    Date: 2023–02

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