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on Economic Growth |
| By: | Giorgio Fabbri (Univ.Grenoble Alpes, CNRS, INRIA, Grenoble INP, GAEL, Grenoble, France); Silvia Faggian (Department of Economics, University Of Venice Ca' Foscari, Italy); Giuseppe Freni (Department of Business and Economics, University of Naples “Parthenope†, Naples, Italy.) |
| Abstract: | This study examines the dynamics of capital stocks distributed among several nodes, representing different sites of production and connected via a weighted, directed network.The network represents the externalities or spillovers that the production in each node generates on the capital stock of other nodes. A regulator decides to designate some of the nodes for the production of a consumption good to maximise a cumulative utility from consumption. It is demonstrated how the optimal strategies and stocks depend on the productivity of the resource sites and the structure of the connections between the sites. The best locations to host production of the consumption good are identified per the model's parameters and correspond to the least central (in the sense of eigenvector centrality) nodes of a suitably redefined network that combines both flows between nodes and the nodes' productivity. |
| Keywords: | Capital allocation, Production externalities, Network spillovers, Economic centrality measures. |
| JEL: | C61 D62 O41 R12 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2023:23&r=gro |
| By: | Alberto Bucci (ICEA International Center for Economic Analysis, Waterloo Ontario); Boubacar Diallo (Central Bank of Luxembourg and Qatar University); Simone Marsiglio (University of Pisa) |
| Abstract: | We analyze the role that human capital plays in driving the non-monotonic relation between economic growth and financial development. At this aim we build a theoretical model of endogenous growth in which the nature of the growth and finance nexus is nonlinear and actually depends on the educational level, which ultimately determines the way through which financial development affects both the productivity and the depreciation of human capital. The dependence of the non-monotonic (i.e., bell-shaped) growth and finance nexus on human capital suggests that there may exist a threshold education level beyond which the sign of the relation changes. We econometrically test such a theoretical prediction in a rich and large data set comprising a cross-section of 133 countries over the period 1970-2011. We rely on the GMM instrumental variable approach to address endogeneity issues, and we consider a large number of control variables. After performing a number of robustness checks, all our results are consistent with the view that human capital helps to explain the nonlinear relationship between finance and growth. In particular, we find support for our theoretical model’s conclusion that financial development may be harmful to economic growth in countries that already have high levels of education, while it may be beneficial in those countries in which human capital is less abundant. |
| Keywords: | Economic Growth, Financial Development, Human Capital |
| JEL: | G00 G10 O40 O41 |
| Date: | 2023–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:567&r=gro |
| By: | Li, defu; Bental, Benjamin |
| Abstract: | The neoclassical Euler equation provides the necessary conditions for households to maximize lifetime utility by allocating income between consumption and investment, and is the core equation for solving the steady-state of the neoclassical growth model. The existing textbooks (Barro and Sala-i-Martin, 2004, ch6.3; Acemoglu, 2009, ch13.2, ch15.6; Aghion and Howitt, 2009, ch3.2.2) ignore the premise of this equation and directly apply it to solve the steady state of other growth models, which not only leads to incorrect results but also limits the ability of growth models to analyze the steady-state technological progress direction. This note first points out and rigorously verifies the errors in existing textbooks; Then, by replacing the capital accumulation function with exogenous growth rate with the generalized capital accumulation function considering adjustment costs of investment in the Acemoglu (2009, ch15.6) model, the note put forward the generalized Euler equation and steady-state equilibrium including capital-augmenting technological progress, which reveals the necessary conditions for the neoclassical Euler equation and Uzawa’s (1961) steady-state theorem; Finally, it is pointed out that the possible reasons for the misuse of the neoclassical Euler equation in existing textbooks maybe confuse the rental price of capital and the interest rate of investment. |
| Keywords: | Neoclassical Euler equation, Uzawa’s steady-state theorem, Growth model, the direction of technical change，the rental price of capital, the interest rate of investment |
| JEL: | E13 O30 O40 O41 |
| Date: | 2023–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:119048&r=gro |
| By: | Tomohiro Uchiyama |
| Abstract: | In this paper, we study a neoclassical growth model with a (productivity inhibiting) pollution effect. In particular, we obtain a necessary and sufficient condition for the existence of a topological chaos. We investigate how the condition changes as the strength of the pollution effect changes. This is a new application of a recent result characterising the existence of a topological chaos for a unimodal interval map by Deng, Khan, Mitra (2022). |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2311.03594&r=gro |
| By: | Kouam, Henri; Mua, kingsley |
| Abstract: | This paper presents the theory of innovation in attaining economic sciences. It equally reviews economic literature and investigates creation from different economic models. It begins with analyzing views on classical economics, including Adam Smith and David Ricardo. This is followed by discussions on theory in innovation today, as handled in the knowledge-based economy. Analyzing the achievements in economic thought outlines that innovation's importance and relevance have grown over the last decade. |
| Keywords: | Innovation, Economics, Development, Theory, Economic Growth, |
| JEL: | B1 B12 B22 O3 O40 |
| Date: | 2023–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:119162&r=gro |
| By: | Li, defu; Bental, Benjamin |
| Abstract: | The history of modern economic growth indicates that technical change is not only purely labor-augmenting, but also skill biased the 20th century. Although there are papers that have separately analyzed why technical change be purely labor-augmenting or skill biased, there is no paper analyzing why it may be both labor-augmenting and skill biased. This article develops a growth model with endogenous direction and bias of technical change, in which capital accumulation process considers investment adjustment costs, and firms can undertake capital-, skill labor- and unskilled labor-augmenting technological improvements. In the steady-state equilibrium, technical change can include all of them. However, according to the results of the model, when there is no investment adjustment cost (implying capital supply with infinite elasticity), in steady state, technical change will be purely labor-augmenting. If market size effect dominated prices effect in innovation and the relative supply of skilled labor increase continuously, then technological progress will be purely labor-augmenting and skill biased, which result that the skill premium continue to rise, while the economic growth first increases and then decreases in an inverted U-shaped change, and the labor share of income first decreases and then increases in a U-shaped change. |
| Keywords: | Endogenous direction of technical change, Skilled Labor Supply, Skill Premium, Economic Growth, Labor Share, U-shaped change, Inverted U-shaped change |
| JEL: | E13 E25 J21 J31 O15 O33 O41 |
| Date: | 2023–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:119047&r=gro |
| By: | Castañeda Garza, Diego (Department of Economic History, Uppsala University); Skoglund, William (Department of Economic History, Uppsala University); Andersson, Jonatan (Department of Economic History, Uppsala University) |
| Abstract: | In this article, we investigate the effect of encroachment policies on wealth in late 19th century conducted by the Mexican state in the state of Sonora. Using a novel database of will inventories from the Mexican state of Sonora, we find that the upper-class saw large wealth gains as a result of access to new agricultural land and irrigation. We argue that encroachment policies had a substantial effect on wealth but that this effect is heterogenous across social groups. We highlight the role of institutions in shaping wealth and inequality in the early periods of American economic development. |
| Keywords: | Wealth; Encroachment; Mexico; Inequality; Institutions |
| JEL: | D31 N36 N46 O54 P48 |
| Date: | 2023–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uuehwp:2023_003&r=gro |