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on Economic Growth |
| By: | Anton Korinek; Donghyun Suh |
| Abstract: | We analyze how output and wages behave under different scenarios for technological progress that may culminate in Artificial General Intelligence (AGI), defined as the ability of AI systems to perform all tasks that humans can perform. We assume that human work can be decomposed into atomistic tasks that differ in their complexity. Advances in technology make ever more complex tasks amenable to automation. The effects on wages depend on a race between automation and capital accumulation. If the distribution of task complexity exhibits a sufficiently thick infinite tail, then there is always enough work for humans, and wages may rise forever. By contrast, if the complexity of tasks that humans can perform is bounded and full automation is reached, then wages collapse. But declines may occur even before if large-scale automation outpaces capital accumulation and makes labor too abundant. Automating productivity growth may lead to broad-based gains in the returns to all factors. By contrast, bottlenecks to growth from irreproducible scarce factors may exacerbate the decline in wages. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2403.12107&r=gro |
| By: | Guillaume Blanc |
| Abstract: | This research shows that secularization accounts for the remarkably early fertility decline in France. The demographic transition, a turning point in history and an essential condition for development, began in France more than a century earlier than in any other country. Why it happened so early is one of the ‘big questions of history’ because it challenges traditional explanations and because of data limitations. Using a novel dataset crowdsourced from publicly available genealogies, I comprehensively document the decline in fertility and its timing with a representative sample of the population. Drawing on a wide range of sources and data, I document an important process of secularization in the eighteenth century and find a strong and robust association with the timing of the transition across regions and individuals. Finally, I discuss the persistent impact of the transition on economic growth and explore the drivers of secularization. |
| Keywords: | fertility, development, secularization |
| JEL: | N33 O10 Z12 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:man:allwps:0003&r=gro |
| By: | Bouscasse, P.; Nakamura, E.; Steinsson, J. |
| Abstract: | We provide new estimates of the evolution of productivity in England from 1250 to 1870. Real wages over this period were heavily influenced by plague-induced swings in the population. We develop and implement a new methodology for estimating productivity that accounts for these Malthusian dynamics. In the early part of our sample, we find that productivity growth was zero. Productivity growth began in 1600—almost a century before the Glorious Revolution. We estimate productivity growth of 3% per decade between 1600 and 1760, which increased to 6% per decade between 1770 and 1860. Our estimates attribute much of the increase in output growth during the Industrial Revolution to a falling land share of production, rather than to faster productivity growth. Our evidence helps distinguish between theories of why growth began. In particular, our findings support the idea that broad-based economic change preceded the bourgeois institutional reforms of 17th century England and may have contributed to causing them. We estimate relatively weak Malthusian population forces on real wages. This implies that our model can generate sustained deviations from the “iron law of wages†prior the Industrial Revolution. |
| JEL: | N13 O40 J10 |
| Date: | 2023–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camjip:2309&r=gro |
| By: | Miguel D. Ramirez (Department of Economics, Trinity College) |
| Keywords: | Convergence, Economic Growth, Endogenous Growth, and Foreign Capital Formation. |
| JEL: | O40 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:tri:wpaper:2401&r=gro |
| By: | Pierre LESUISSE |
| Abstract: | Recurrently in the literature, we find that public spending on education has an ambiguous impact on economic growth. Using the World Bank’s World Development Indicators, we revisit an endogenous growth model of Blankenau et al. (2007), over the last thirty years. By integrating the fiscal impact on growth of public spending, we analyze the empirical relationship between public spending on education and economic development. We do not observe significant results among countries belonging to upper-middle and high-income groups. Using Data Envelopment Analysis à la Ji and Lee (2010), we compute a performance measure of public spending on education to generate human capital (measured through Expected Human Capital index from Lim et al. (2018) or Years of Schooling from Barro and Lee (2013)). Once we control for the performance of public spending, we find a positive and significant impact of increased spending on education. This is particularly the case in high performing countries. We then decompose public spending on education by level (primary, secondary and tertiary). We only find significant impact for primary education expenditure. |
| Keywords: | Education; Endogenous growth; Fiscal policy; Performance. |
| JEL: | H52 O11 O47 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2024-10&r=gro |
| By: | Ohler, Johann |
| Abstract: | This paper studies the individual-level assumptions of the Malthusian model in pre-industrial Germany. By exploiting demographic records for 150, 000 individuals from the historical county of Wittgenstein, I test for status gradients in child mortality (the Malthusian positive check) and marital fertility (preventive check). While I find no evidence for a status gradient in child mortality, I find strong evidence for a status gradient in fertility. The richest families had, on average, one extra child when compared to their poorer compatriots. Turning to the mechanics of the preventive check, this appears to have been driven mostly by an earlier age of marriage amongst high status families. Disaggregating my dataset into six periods reveals that this fertility differential began to disintegrate around 1800. Ergo, I conclude that prior to 1800, the German population was subject to some Malthusian forces, albeit it was not stuck in a rigid Malthusian equilibrium, as conceptualised by some neo Malthusian scholars. |
| Keywords: | German Economic History; Malthus; Demographic History; European Marriage Pattern; Unified Growth Theory |
| JEL: | J12 J13 N33 N93 O40 |
| Date: | 2024–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120451&r=gro |
| By: | Callen, Mike; Weigel, Jonathan; Yuchtman, Noam |
| Abstract: | We review an emerging experimental literature studying institutional change. Institutions are a key determinant of economic growth, but the “critical junctures” in which institutions can change are not precisely defined. For example, such junctures are often identified ex post, raising methodological problems: selection on the outcome of institutional change; an inability to study beliefs, central to coordination and thus the process of institutional change; and an inability to conduct experiments to identify causal effects. We argue that critical junctures are identifiable in real-time as moments when there exists deep uncertainty about future institutions. Consistent with this conception, the papers reviewed: (i) examine changes to institutions, i.e., the “fundamental rules of the game”; (ii) are real-time studies of plausible critical junctures; and, (iii) use field experiments to achieve causal identification. Substantively, this literature examines institutional changes in state capacity and legitimacy, political inclusion, and political accountability. We also advocate more systematic measurement of beliefs about future institutions to identify critical junctures as they happen and provide an empirical proof of concept. Such work is urgent given contemporary critical junctures arising from democratic backsliding, state fragility, climate change, and conflicts over the rights of the marginalized. |
| Keywords: | institutional change; critical junctures; field experiments; fragile states; belief elicitation |
| JEL: | P00 O10 D70 |
| Date: | 2023–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:122367&r=gro |
| By: | Maxime Menuet (Université Côte d'Azur, CNRS, GREDEG, France) |
| Abstract: | This paper focus on civil conflicts arising from natural resource appropriation in a growth model with rent-seeking behavior and how fiscal policy can mitigate them. Such conflicts, if destructive, make the development trajectory indeterminate. There are two self-fulfilling equilibria, including a poverty-conflict trap associated with large civil conflicts. The resource curse may emerge because of pessimistic household expectations. However, fiscal policy can help overcome the tradeoff between conflict and economic development and partially solve the conflict-based resource curse. In this regard, there is an appropriate sharing of the government budget between military spending and human capital investment that minimizes conflict incentives. |
| Keywords: | natural resource, civil conflict, economic growth, rent-seeking |
| JEL: | O41 Q20 E62 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2024-05&r=gro |
| By: | Yumeng Gu; Sanjay R. Singh |
| Abstract: | We incorporate incumbent innovation in a Keynesian growth framework to generate an endogenous distribution of market power across firms. Existing firms increase markups over time through successful innovation. Entrant innovation disrupts the accumulation of market power by incumbents. Using this environment, we highlight a novel misallocation channel for monetary policy. A contractionary monetary policy shock causes an increase in markup dispersion across firms by discouraging entrant innovation relative to incumbent innovation. We characterize the circumstances when contractionary monetary policy may increase misallocation. |
| Keywords: | monetary policy; markup dispersion; allocative efficiency; market power |
| Date: | 2024–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:97992&r=gro |