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on Economic Growth |
| By: | Yuhki Hosoya |
| Abstract: | We consider a class of economic growth models that includes the classical Ramsey--Cass--Koopmans capital accumulation model and verify that, under several assumptions, the value function of the model is the unique viscosity solution to the Hamilton--Jacobi--Bellman equation. Moreover, we discuss a solution method for these models using differential inclusion, where the subdifferential of the value function plays an important role. Next, we present an assumption under which the value function is a classical solution to the Hamilton--Jacobi--Bellman equation, and show that many economic models satisfy this assumption. In particular, our result still holds in an economic growth model in which the government takes a non-smooth Keynesian policy rule. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.16643&r= |
| By: | Lucie Coufalová (Masaryk University, Faculty of Economics and Administration, Department of Economics, Brno, Czech Republic); Fanny H. Dellinger (WIFO, Vienna, Austria); Peter Huber (WIFO, Vienna, Austria); Štěpán Mikula (Masaryk University, Faculty of Economics and Administration, Department of Economics, Brno, Czech Republic) |
| Abstract: | We analyze the impacts of three major unexpected border regime changes that occurred during the course of 20th century on population growth along the Austrian-Czech border. Using historical municipal-level census data reaching back to 1880, we find no effects of the dissolution of the Austro-Hungarian Empire (1919) but strong and oppositely signed effects of the drawing (1948) and the fall (1989) of the Iron Curtain in both countries. Our findings indicate that border regimes affect population growth via economic as well as non-economic mechanisms. |
| Keywords: | Population growth, border regions, economic geography |
| JEL: | N94 R12 R23 J11 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:mub:wpaper:2024-03&r= |
| By: | Miller, Marcus (University of Warwick, CAGE and CEPR) |
| Abstract: | As the world experiences a fourth industrial revolution - in Information Technology - we look back at how things turned out in the first Industrial Revolution, which began when Adam Smith was writing The Wealth of Nations. For the historical record, we draw on the recent study of Power and Progress by Daron Acemoglu and Simon Johnson, who describe how the benefits of innovation were – or were not - spread across society in Britain at that time. This paper focuses on the case of India under colonial rule, however, where two themes emerge. First, how the transfer of technology under the control of a private company – based in London and granted monopoly powers by the British government - was enough to stymie the ‘virtuous spiral of Smithian growth’ for a century or more. Second, how two centuries of colonial control also deprived the indigenous population of what Amartya Sen has claimed is the key insurance against famine - namely democratic accountability. The paper end with brief remarks on how industrial policy in India of today could help spread the benefits of the current IT revolution. |
| Keywords: | Adam Smith ; specialisation ; development ; colonisation ; famine ; case studies in economic history JEL Codes: B12 ; F54 ; L12 ; Q1 ; O30 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1497&r= |
| By: | Marion Davin (CEE-M, Univ Montpellier, CNRS, INRAE, SupAgro, Montpellier, France); Mouez Fodha (Paris School of Economics and University Paris 1 Panthéon-Sorbonne); Thomas Seegmuller (Aix Marseille Univ, CNRS, AMSE, Marseille, France) |
| Abstract: | This paper examines an endogenous growth model that allows us to consider the dynamics and sustainability of debt, pollution, and growth. Debt evolves according to the financing adaptation and mitigation efforts and to the damages caused by pollution. Three types of features are important for our analysis: The technology through the negative effect of pollution on TFP; The fiscal policy; The initial level of pollution and debt with respect to capital. Indeed, if the initial level of pollution is too high, the economy is relegated to an endogenous tipping zone where pollution perpetually increases relatively to capital. If the effect of pollution on TFP is too strong, the economy cannot converge to a stable and sustainable long-run balanced growth path. If the income tax rates are high enough, we can converge to a stable balanced growth path with low pollution and high debt relative to capital. This sustainable equilibrium can even be characterized by higher growth and welfare. This last result underlines the role that tax policy can play in reconciling debt and environmental sustainability. |
| Keywords: | Environmental damage, pollution, fiscal policy, public debt, sustainability |
| JEL: | E60 H63 Q54 Q58 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:aim:wpaimx:2418&r= |
| By: | Giorgio Fabbri; Silvia Faggian; Giuseppe Freni |
| 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 maximize 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: | 2023–05 |
| URL: | https://d.repec.org/n?u=RePEc:gbl:wpaper:2024-04&r= |
| By: | Carlos G\'oes |
| Abstract: | Can trade integration induce product innovation? I document that countries that joined the European Union (EU) started producing more product varieties, investing more in R&D, and trading more compared to candidate countries that did not join at a given horizon. Additionally, I show that a plausibly exogenous increase in market access increases the probability of a given country starting production of and exporting a given product. To rationalize this reduced-form evidence, I propose a new quantitative framework that integrates the forces of specialization and market size. This is a dynamic general equilibrium model of frictional trade and endogenous growth with arbitrarily many asymmetric countries that nests the Eaton-Kortum model of trade and the Romer growth model as special cases. The key result is an analytical expression to decompose gains from trade into dynamic and static components. In this framework, the product innovation growth rate increases with higher market access. Finally, a quantitative version of the model suggests that: (a) the EU enlargement increased its long-run yearly growth rate by about 0.10pp; and (b) dynamic gains can account for between 65-90% of total welfare gains from trade. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.08727&r= |
| By: | Ruveyda Nur Gozen |
| Abstract: | How do stronger property rights for disadvantaged groups affect innovation? I investigate the impact of strengthened property rights for women on U.S. innovation by analyzing the Married Women's Property Acts, which granted equal property rights to women starting in 1845 in New York State. I examine the universe of granted patents from 1790 until 1901, exploiting the staggered adoption of the laws over time across states. The strengthening of women's property rights led to a 40% increase in patenting activity among women in the long run, with effects peaking about a decade after the laws were introduced. Importantly, women's innovations were not of lower quality (as measured by a novelty index based on patent text analysis) and did not generate negative effects on male innovation. Finally, I show that the main mechanism was through higher human capital accumulation among women inventors and innovation incentives, rather than an increase in participation in STEM fields, labor force participation, or relieving financial frictions. |
| Keywords: | innovations, gender, property rights, economic development |
| Date: | 2024–06–11 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2005&r= |
| By: | Christophe André; Peter Gal; Matthias Schief |
| Abstract: | The increase in human longevity is a major achievement, which brings individual well-being and strong contributions to society, but population ageing also generates challenges. This paper documents demographic trends in OECD countries, highlighting that ageing today largely reflects past fertility, longevity, and migration developments. Policies have moderate or delayed impacts on population ageing, hence they should also focus on adapting to ongoing demographic trends. The paper quantifies ageing’s potential impacts on labour supply and GDP per capita, showing that the extension of working lives as longevity rises could mitigate, but not completely offset, the negative effects of ageing on employment. It also examines how ageing may affect productivity through various micro and macroeconomic mechanisms. Finally, it provides policy directions for addressing the ageing challenge, through supporting healthy ageing, boosting employment, job quality and labour mobility in all age groups, and promoting older workers’ productivity by further developing lifelong learning and fostering an age-friendly management culture. |
| Keywords: | Ageing, demography, economic growth, Fertility, health, labour market policy, lifelong learning, longevity, migration, productivity |
| JEL: | F22 I18 J08 J11 J13 J14 Q47 |
| Date: | 2024–06–14 |
| URL: | https://d.repec.org/n?u=RePEc:oec:ecoaaa:1807-en&r= |