nep-gro New Economics Papers
on Economic Growth
Issue of 2023‒03‒27
eleven papers chosen by
Marc Klemp
University of Copenhagen

  1. Beasts of Burden, Trade, and Hierarchy: The Long Shadow of Domestication By Andreas Link
  2. Fickle Fossils. Economic Growth, Coal and the European Oil Invasion, 1900-2015 By Miriam Fritzsche; Nikolaus Wolf
  3. FOREIGN AID AND ECONOMIC GROWTH IN SUB-SAHARAN AFRICAN COUNTRIES By Santos Bila; Mduduzi Biyase; Matias Farahane; Thomas Udimal
  4. The Road to Gender-Equitable Growth: A State-level Analysis of Social Reproduction in the U.S. By Aashima Sinha
  5. Population Aging, Silver Dividend, and Economic Growth By Park, Donghyun; Shin, Kwanho
  6. The Impact of Investments on Economic Growth: Evidence from Tajikistan By Abduvaliev, Mubnzhon
  7. Title Assessment of the human capital contribution to the total factor productivity in Russia By Kaukin Andrey
  8. New Institutional Economics and Cliometrics By Eric C. Alston; Lee J. Alston; Bernardo Mueller
  9. Similarities and Differences in the Adoption of General Purpose Technologies By Ajay K. Agrawal; Joshua S. Gans; Avi Goldfarb
  10. State-Based Conflict and Entrepreneurship: Empirical Evidence By Naudé, Wim; Amorós, Ernesto; Brück, Tilman
  11. The Green Transition Dilemma: the Impossible (?) Quest for Prosperity of South American Economies By Sebastian VALDECANTOS

  1. By: Andreas Link
    Abstract: This paper studies how the prehistoric geographic distribution of domesticable transport animal species has contributed to shaping di erences in development. I identify the historic ranges of the ten animal species that are (1) suitable for domestication and (2) suitable for carrying loads. Based on these ranges, I create a measure of the prehistoric presence of domesticable transport animals around the world. The empirical analysis reveals a strong relationship between the historic presence of domesticable transport animals and the emergence of ancient long-distance trade routes and early forms of hierarchy. Historical access to domesticable transport animals also continued to matter in the long run: Pre-industrial ethnic groups living in regions historically home to domesticable transport animals were more involved in trade and had built more complex hierarchical structures. Moreover, these groups developed greater numerical skills, larger levels of labor specialization, and higher levels of class stratification, thus underscoring the broad cultural and developmental impacts exerted by historical access to domesticable transport animals.
    Keywords: Domestication, hierarchy, long-distance trade, persistence
    JEL: F10 N30 N70 O10 Z10
    Date: 2023–03
  2. By: Miriam Fritzsche; Nikolaus Wolf
    Abstract: Fossil fuels have shaped the European economy since the industrial revolution. In this paper, we analyse the effect of coal and oil on long-run economic growth, exploiting variation at the level of European NUTS-2 and NUTS-3 regions over the last century. We show that an “oil invasion†in the early 1960s turned regional coal abundance from a blessing into a curse, using new detailed data on carboniferous strata as an instrument. Moreover, we show that human capital accumulation was the key mechanism behind this reversal of fortune. Not only did former coal regions fail to accumulate sufficient levels of human capital, but pre-industrial human capital helped declining regions to reinvent themselves. Without sufficient human capital, fossil fuels did never generate sustainable growth.
    Keywords: Coal, Oil Invasion, Education, Reinvention, Economic Growth
    JEL: O13 Q32 N13 R10 I25
    Date: 2022–11–29
  3. By: Santos Bila (College of Business and Economics, School of Economics, University of Johannesburg); Mduduzi Biyase (College of Business and Economics, School of Economics, University of Johannesburg); Matias Farahane (School of Economics, Eduadro Mondlhane University); Thomas Udimal (Southwest forestry University)
    Abstract: This study investigates the effect of Official Development Assistance (ODA) on economic growth in Sub-Saharan African (SSA) countries using a panel of 24 countries over 38 years, extracted from the World Development Indicators, African Development Bank and the Penn World Tables 9.0. (2006). We employ the moment moment quantile regression approach to establish whether the effect of ODA varies along the conditional economic growth distribution. Quantile estimates show that ODA is positively related to economic growth in the Sub-Saharan Africa (SSA) region. Moreover, our study finds that the positive impact of aid is bigger in the countries with high levels of economic growth-- the results show a positive statistically significant effect at 75th and 95% quantiles for 5% and 10%, respectively. Controlling for social infrastructures and institutions quality, the results also show a positive and statistically significant relationship between this control variable and economic growth in 50th quantile, 75th quantile and 95th quantile, suggesting that improvement in institutions quality brings much benefit to the countries within those quantiles compared to those in the lower quantiles. Incorporating institutions quality institutions variable and interaction terms into the model influences the effect of aid on economic growth. With those variables ODA is only effective in countries located within the 25th and 50th quantiles, implying that aid has significant effect on economic growth net of institutions quality and other control variables. The implication of our findings is that aid can be strategically employed as a central instrument for stimulating economic growth in SSA countries, particularly low-income countries.
    Keywords: Official Development Assistance, MM-QR, GDP
    Date: 2023
  4. By: Aashima Sinha
    Abstract: Building on a Kaleckian-structuralist macroeconomic growth model this paper examines the impact of the interaction between labor market gender equality and social reproduction (SR) or care provisioning, on economic growth across U.S. states. Using panel data for 2003-2017 and principal component analysis, I construct two composite scores for each state to capture care provisioning by household, state, and the market sectors on the supply side and caring tendency to invest in human capacities on the demand side. The interaction of these scores results in four stylized SR regimes. Next, I examine the relationship between women’s labor force participation rate (WLFPR) and state’s per-capita growth rate across these regimes. The paper contributes new evidence to the engendering macroeconomics scholarship on promoting gender-egalitarian and pro-care economic growth by showing that: 1) regimes characterized by strong public, market, and gender-equal care provisioning experience higher per-capita growth rates compared to regimes that lack such care provisioning; 2) higher WLFPR is compatible with higher economic growth in states with gender-equal care structures and 3) gender-equitable growth can be achieved via statelevel policies that expand social spending, access to care services, and gender equality in labor market.
    Keywords: social reproduction, care, growth, development, United States, gender, macroeconomics JEL Classification: J22, O4, O11
    Date: 2023
  5. By: Park, Donghyun (Asian Development Bank); Shin, Kwanho (Korea University)
    Abstract: While there are growing concerns about population aging, some studies explore the possibility that population aging can give rise to a silver dividend that contributes to economic growth (ADB 2019). While the demographic dividend refers to the increase of the working-age population, the silver dividend points to increased longevity and longer working life as potential sources of growth in an aging society. Extending Lee and Shin (2021) to include developing countries, we examine the potential for a silver dividend by investigating the channels through which population aging affects economic growth. We find that lower total factor productivity growth is the main mechanism through which population aging harms economic growth. Labor shortage caused by population aging is mostly offset by higher labor force participation rates of males, females, and older workers. In particular, the labor force participation rate of the older people increases the most.
    Keywords: aging; growth; labor force participation; total factor productivity; silver dividend
    JEL: E20 J10 J21 O40 O47
    Date: 2023–03–08
  6. By: Abduvaliev, Mubnzhon
    Abstract: This paper assesses the impact of remittances on economic growth in Central Asian countries during the COVID-19 outbreak. We use a panel data set on economic growth in five Central Asian Republics which were former members of the Soviet Union. We found that a 1% decline in remittance inflow would result in a 0.05% to 0.06% decrease in the average per capita GDP of Central Asian country's economies. We also found that a 1% decrease in the Russian economy, from which most remittances are sent, would reduce the average per capita GDP of Central Asian countries by 0.06%.
    Keywords: Central Asian countries, COVID-19, remittances, economic growth, Russian spillover effect
    JEL: F22 F23
    Date: 2022
  7. By: Kaukin Andrey (Gaidar Institute for Economic Policy)
    Abstract: The paper is structured as follows: the first section systematizes the results of academic literature, assessing the contribution of human capital to economic growth and aggregate productivity, reviews the key indicators of human capital traditionally used in the economic literature. The second section analyzes the dynamics and regional peculiarities of the main indicators of human capital in Russia, identifies key trends in the development of human capital, and makes cross-country comparisons. The third section presents the empirical strategy, the database used and the results of the assessment of the impact of human capital on productivity. At the end of the work, the main conclusions of the study and recommendations are presented.
    Keywords: Russian economy, human capital, productivity
    JEL: J24
    Date: 2022
  8. By: Eric C. Alston; Lee J. Alston; Bernardo Mueller
    Abstract: The New Institutional Economics (NIE) has its early roots in Cliometrics. Cliometrics began with a focus on using neoclassical theory to develop and test hypotheses in economic history. But empirical consideration of economic and political development within and across countries is limited, absent consideration of the institutional context. The NIE as applied in economic history first focused on the roles of transaction costs and property rights. From this micro-institutional perspective, the NIE expanded its focus to the role of institutions and norms on economic development as well as how economic forces along with political institutional variance influences outcomes both within and across countries. This involves considering both forces that impede and promote economic and political convergence across countries as well the forces that determine a transition to a new economic or political trajectory altogether. Testing for the determinants of economic and political development is plagued with omitted variables and endogeneity concerns, a constraint which has recently prompted scholars to draw on complexity theory to further supplement the NIE and Cliometrics.
    JEL: B52 F63 N01 P0 P50
    Date: 2023–02
  9. By: Ajay K. Agrawal; Joshua S. Gans; Avi Goldfarb
    Abstract: Economic models provide little insight into when the next big idea and its associated productivity dividend will come along. Once a general purpose technology (GPT) is identified, the economist’s toolkit does provide an understanding when firms will adopt a new technology and for what purpose. The focus of the literature has been on commonalities across each type of GPT. This focus is natural, given that the goal of the literature has been to identify generalizable insights across technologies. Broadly, this literature emphasizes heterogeneity in co-invention costs across firms. Each GPT, however, provides a distinct benefit. Steam provided a new power source. The internet facilitated communication. The differences between GPTs are important for understanding adoption patterns. Using the examples of the internet and artificial intelligence, we discuss how both co-invention costs and distinct benefits determine the adoption of technology. For both technologies, we demonstrate that discussions of the impact of a GPT on productivity and growth need to emphasize the benefits as well as the costs. The goal of this paper is therefore to link the literature on co-invention costs with an understanding of the distinct benefits of each GPT.
    JEL: O33 O4
    Date: 2023–02
  10. By: Naudé, Wim (RWTH Aachen University); Amorós, Ernesto (EGAP Tecnológico de Monterrey CEM); Brück, Tilman (ISDC - International Security and Development Center)
    Abstract: This paper investigates the relationship between state-based conflict and entrepreneurship. From a survey of the existing literature, we formulate two hypotheses: (1) state-based conflict has a negative association with productive and opportunity-motivated forms of entrepreneurship, and (2) a positive association with unproductive and necessity-motivated forms of entrepreneurship. We test these hypotheses by drawing on several state-based conflict and entrepreneurship measures, using appropriate estimators, and employing robustness checks. The evidence supports our hypotheses. Necessity-motivated start-up entrepreneurship is, on average, almost three times higher in countries in conflict than in countries not in conflict. Development level matters. In countries with less unemployment, more finance, and higher levels of physical, human capital and GDP, entrepreneurship is more resilient, and the ratio of female-to-male entrepreneurs in opportunity-motivated entrepreneurship higher.
    Keywords: entrepreneurship, conflict, war, small business, employment
    JEL: L26 M13 J23 N40 O11 O17
    Date: 2023–02
  11. By: Sebastian VALDECANTOS
    Abstract: This paper explores the tensions that the transition toward a zero-carbon economy entails forcountries relying on natural resources exploitation as the main drivers of (net) exports, as is the case of most South American economies. Given their relatively low diversification and high technology gaps compared to advanced economies, attaining higher prosperity levels driven by sustained economic growth has recurrently been hampered by balance of payments crises. Using a simple long-run demand-led theoretical model with balance of payments constrained growth we show that if the structural limitations in their productive structure are not overcome, the decarbonization of the economy, be it exogenously imposed by the rest of the world or sovereignly decided by each South American country, will be exposed to the dilemma of increasing growth or reducing greenhouse gas emissions. Underpinning this dilemma is the essential role of exports and their associated carbon intensity. Finally, we show that to solve this green transition dilemma, even a process of structural change like the one proposed by the old Latin American structuralist school might not be sufficient – it is only through a “big environmental push” that the long-lastingly desired prosperity of South American countries can cease to be an impossible quest.
    Keywords: Amérique latine
    JEL: Q
    Date: 2023–02–28

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