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on Economic Growth |
| By: | Jesús Fernández-Villaverde (University of Pennsylvania); Gustavo Ventura (Arizona State University); Wen Yao (Tsinghua University) |
| Abstract: | Due to population aging, GDP growth per capita and GDP growth per working-age adult have become quite different among many advanced economies over the last several decades. Countries whose GDP growth per capita performance has been lackluster, like Japan, have done surprisingly well in terms of GDP growth per working-age adult. Indeed, from 1998 to 2019, Japan has grown slightly faster than the U.S. in terms of per working-age adult: an accumulated 31.9% vs. 29.5%. Furthermore, many advanced economies appear to be on parallel balanced growth trajectories in terms of working-age adults despite important differences in levels. Motivated by this observation, we calibrate a standard neoclassical growth model in which the growth of the working-age adult population varies in line with the data for each economy. Despite the underlying demographic differences, the calibrated model tracks output per working-age adult in most economies of our sample. Our results imply that the growth behavior of mature, aging economies is not puzzling from a theoretical perspective. |
| Keywords: | Demographics, Growth, Developed Economies |
| JEL: | E2 J1 |
| Date: | 2023–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:24-002&r=gro |
| By: | Juhasz, Reka; Steinwender, Claudia |
| Abstract: | We discuss recent work evaluating the role of the government in shaping the economy during the long 19th century, a practice we refer to as industrial policy. We show that states deployed a vast variety of different policies aimed at, primarily, but not exclusively, fostering industrialization. We discuss the thin, but growing literature that evaluates the economic effects of these policies. We highlight some fruitful avenues for future study. |
| Keywords: | industrial policy; first wave of globalization; industrialization; infant industry protection; technology policy; transport infrastructure; telegraph; 19th century |
| JEL: | L5 N1 N4 N6 |
| Date: | 2023–10–06 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:121313&r=gro |
| By: | CARMONA, JULIO (University of Alicante, D. Quantitative Methods and Economic Theory) |
| Abstract: | The recent sad news about the Robert Solow’s decease has motivated a review of his most celebrated contribution to Economics, his model of economic growth. In this paper, I illustrate its versatility and usefulness by combining it with the problem that endemic diseases has for the economic performance of most emerging economies. The literature about economic development have examined this problem with particular emphasis on the necessary sanitary measures to raise the level of health. These measures have been advocated on the basis that they will have big positive effects on productivity, real wages and per capita GDP. To illustrate to our undergraduate students both, the value of health for economic development and the intuitions the Solow model can provide, I couple it with the so called SIS model, a concise description of persistent diseases. This will help to illustrate how endemic diseases affect negatively society’s welfare and, for the case in which the endemic disease increases the mortality rate, the rate of economic growth. |
| Keywords: | SIS Model; Solow Model; Poverty Trap |
| JEL: | E00 I15 O40 |
| Date: | 2024–02–05 |
| URL: | http://d.repec.org/n?u=RePEc:ris:qmetal:2024_001&r=gro |
| By: | Bräuer, Richard |
| Abstract: | This paper proposes a model that explains both recently documented facts about the decline of disruptive innovation and the decline in productivity growth as the result of large firms trying to monopolize technologies by poaching inventors from disruptive activities. To come to this conclusion, the paper builds an endogenous growth model with inventor labor markets on which firms can interact strategically. To inform this model, I perform an event study of the effect of disruptive inventions on their technology fields using PATSTAT (1980-2010). I document that technology classes without disruption slowly trend towards incrementalism and that after a disruption, more patents get registered and research becomes less incremental. |
| Keywords: | disruptive innovation, general equilibrium, general purpose technology, innovation strategies, inventor labor markets, microeconometrics |
| JEL: | J24 J42 J44 O12 O33 O41 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwhdps:281190&r=gro |
| By: | Dienes, Christian; Schneck, Stefan; Wolter, Hans-Jürgen |
| Abstract: | This research note examines the relationship between start-up rates and GDP per capita growth in urban and rural regions in Germany. Hereby, we take into account that urban and rural areas differ markedly in their resource endowment for entrepreneurship, which might be responsible for different effects of start-up activity on regional development. Therefore, we examine the growth implications rural entrepreneurship might have on the local economy. Our results suggest that new business formation is positively associated with economic growth in rural areas. In urban districts, however, the effect of start-up activity is insignificant. Therefore, regional development is less dependent on the emergence of new businesses in urban counties. The results also unveil that the often-cited inverse U-shaped relationship between entrepreneurship and GDP growth is mainly evident in rural areas. |
| Keywords: | Regional growth, entrepreneurship, start-up rate |
| JEL: | L26 O18 O47 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifmwps:281788&r=gro |
| By: | Vindigni, Andrea (University of Genova) |
| Abstract: | A model of endogenous growth is presented, based on productive public expenditures, and featuring some degree of income inequality, and polarization in policy preferences. The main innovation lays in the political process determining capital taxation that relies, both on voting and on "influence activities, " exploited by the capitalist elite in order to capture some political power at the expenses of the median voter. In particular, investments in lobbying activities allow the rich to obtain lower capital taxes, to the benefit of both themselves and economic growth. The model's equilibrium dynamics features variable taxes and lobbying. In addition, it is established the existence of a transitional dynamics featuring convergence to a balanced growth path, characterized by constant taxes and lobbying (and a constant growth rate of consumption and capital). Capital accumulation leads, along the transitional path, to more and more lobbying, that asymptotically cause taxation to reach precisely the tax rate preferred by the capitalists (induced by a very large political pressure on the government). Specifically, the (unique) balanced growth equilibrium features the maximization of the net interest rate, as well as the economy's growth rate and capitalists' welfare. On the transitional path, lobbying reduces the workers' political weight (and their consumption), and therefore makes fiscal policy relatively more and more capitalists friendly. Policy polarization (loosely speaking reflecting inequality) has somewhat interesting effects along the transitional path towards balanced growth. Hereby, actual taxes become more capitalists-friendly relatively to the Meltzer and Richard's (1981) canonical median voter tax benchmark, mutatis mutandis. In the end, full convergence is established, from a pure democracy ruled through the de jure power only, to a political economic realm totally de facto dominated by the few capitalists, i.e. to an "oligarchic technocracy, " possibly ruled by the "top 1%" of the population. |
| Keywords: | political economy, government, inequality, economic growth, redistribution, lobbying |
| JEL: | O11 O43 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16723&r=gro |