nep-gro New Economics Papers
on Economic Growth
Issue of 2023‒09‒11
seven papers chosen by
Marc Klemp, University of Copenhagen

  1. The Emergence of the Child Quantity-Quality Tradeoff - insights from early modern academics By Thomas Baudin; David de la Croix
  2. Evolution from political fragmentation to a unified empire in a Malthusian economy By Chu, Angus; Peretto, Pietro; Furukawa, Yuichi
  3. The Elasticity of Substitution Between Skilled and Unskilled Labor in Developing Countries: A Directed Technical Change Perspective By Mr. Alberto Behar
  4. The Cointegration Relationship between Patent, Domestic Investment and Economic Growth in United States of America By Othmani, Abdelhafidh; Ben Yedder, Nadia; Bakari, Sayef
  5. Impact of Final Consumption, Domestic Investment, Exports, and Imports on Economic Growth in Albania By Akermi, Najwa; Ben Yedder, Nadia; Bakari, Sayef
  6. Financial Integration and Economic Growth in Europe By Guglielmo Maria Caporale; Anamaria Diana Sova; Robert Sova
  7. No pain, no gain: implications in consumption and economic growth By Sun, Tianyu; Tian, Liu

  1. By: Thomas Baudin (IESEG School of Management, Univ. Lille); David de la Croix (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: We examine the relationship between family size and human capital among academics in Northern Europe over the two centuries prior to the Industrial Revolution. To measure scholars' human capital, we develop a novel and consistent approach based on their publications. We find that scholars with a high number of publications shifted from having more siblings to having fewer than others during the first half of the 18th century. This shift is consistent with an evolutionary growth model in which the initial Malthusian constraint leads the high human capital families to reproduce more, before being endogenously substituted by a Beckerian constraint with a child quality-quantity tradeoff. Our results support a reinterpretation of the Galor and Moav (2002)'s approach, in which the decline of Malthusian constraints is linked to human capital accumulation during the 18th century.
    Keywords: Fertility, Human Capital, Premodern Europe, Universities, Academies, Evolution, Natural Selection, Malthusian Stagnation
    JEL: O11 O40 J11 J13 N13 N33
    Date: 2023–08–14
  2. By: Chu, Angus; Peretto, Pietro; Furukawa, Yuichi
    Abstract: What are the origins of political fragmentation in Europe and political unification in China? This study develops a Malthusian growth model with multiple states to explore interstate competition and the endogenous evolution of human society from political fragmentation to a unified empire. Our model features an agricultural society with citizens and rulers in a Malthusian environment in which the expansion of one state may come at the expense of another state, depending on the elasticity of the land ratio with respect to the ratio of population between states. If this elasticity is less than unity, then multiple states coexist (i.e., political fragmentation) in the long run. However, if this elasticity is equal to unity, then only one state (i.e., political unification) will survive in the long run. Which state becomes the unified empire depends on the state's military power, agricultural productivity, and its rulers' preference for rent-seeking Leviathan taxation. We also discuss the historical relevance of these theoretical predictions.
    Keywords: Interstate competition; unified empire; Malthusian growth theory
    JEL: H2 H56 O4
    Date: 2023–08
  3. By: Mr. Alberto Behar
    Abstract: We develop a model of endogenous skill-biased technical change in developing countries. The endogenous response to a rise in skill supply counters the traditional substitution effect and dampens its role in reducing wage inequality. The model re-enforces consensus estimates of the elasticity of substitution between more/less educated workers by reconciling dispersed existing estimates. It also rationalizes estimates that were hitherto deemed implausible or model-inconsistent. We produce new estimates for developing countries with a novel global panel (finding values at or just above 2) and with Latin American data that facilitates analysis of dynamics (which reduce estimates to 1.7-1.8). We therefore shed new light on a parameter that is crucial for inequality, growth, and other key macroeconomic questions.
    Keywords: Skill-biased technical change; elasticity of substitution; skill premium; inequality; growth accounting
    Date: 2023–08–11
  4. By: Othmani, Abdelhafidh; Ben Yedder, Nadia; Bakari, Sayef
    Abstract: This empirical paper searched the three way-linkage between patent, domestic investment, and economic growth in the case of USA during the period 1980 – 2020. By using cointegration analysis and VECM Model, we found that there is no causal relationship between the three variables in the long run. However, we found that domestic investment and economic growth cause patent in the short run. which explains why patents are not a source of economic growth and domestic investment in America and that there are other determinants that have stimulated American economic activity.
    Keywords: Cointegration, Patent, Domestic Investment, Economic Growth, United States of America.
    JEL: D23 E22 G31 H54 I28 O16 O31 O32 O47 O51
    Date: 2023
  5. By: Akermi, Najwa; Ben Yedder, Nadia; Bakari, Sayef
    Abstract: The aim of this paper is to explore the impact of final consumption, domestic investment, exports and imports on economic growth in the case of Albania during the period 1996 – 2021. By using cointegration analysis, VECM model and WALD test, empirical analysis indicated that there is no causality relationship between final consumption, exports, domestic investment, imports and economic growth in the long run and in the short run. These findings present the critical economic situation of Albania, which stands in need of an entry of urgent economic reforms and strong strategies to boost economic growth.
    Keywords: Final Consumption, Domestic Investment, Exports, Imports, Economic Growth, VECM, Albania.
    JEL: E21 E22 F11 F14 F43 G11 G31 H54 O16 O47 P33 P45 R53
    Date: 2023
  6. By: Guglielmo Maria Caporale; Anamaria Diana Sova; Robert Sova
    Abstract: This study examines the impact of financial integration on economic growth in the case of 31 European countries over the period from 2000 to 2021 using dynamic panel data models. The estimation results provide evidence of significant positive effects of financial integration on economic growth. They also suggest that the financial integration – economic growth relationship depends on country-specific characteristics such as the level of financial development and the quality of institutions. More precisely, financial integration appears to exert a greater positive influence on growth in the case of the European countries with a higher level of financial development and better institutions.
    Keywords: financial integration, economic growth, Europe, financial development, quality of institutions, dynamic panel models, GMM estimator
    JEL: C33 F36
    Date: 2023
  7. By: Sun, Tianyu; Tian, Liu
    Abstract: Abstract Demand saturation occurs along with economic development, but the theoretical basis for demand saturation is lacking. This study adds to literature by proposing a novel concept named utilization cost, which denotes the physical or mental burden incurred to obtain utility. Correspondingly, we distinguish between quantity and quality of consumption and construct a general utility function. With a generative decision procedure, the analysis shows that utilization costs help to explain the economic dynamics across development stages in terms of demand saturation. And, the long-term state of demand is affected by the properties of utilization costs, determining development directions.
    Date: 2023–07–24

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