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on Economic Growth |
| By: | Tomohiro Hirano (Royal Holloway, University of London); Alexis Akira Toda (Emory University) |
| Abstract: | Asset price bubbles are situations where asset prices exceed the fundamental values defined by the present value of dividends. This paper presents a conceptually new perspective: the necessity of bubbles. We establish the Bubble Necessity Theorem in a plausible general class of economic models: with faster long-run economic growth (G) than dividend growth (Gd) and counterfactual long-run autarky interest rate (R) below dividend growth, all equilibria are bubbly with non-negligible bubble sizes relative to the economy. This bubble necessity condition naturally arises in economies with sufficiently strong savings motives and multiple factors or sectors with uneven productivity growth. |
| Keywords: | bubble, fundamental value, possibility versus necessity |
| JEL: | D53 G12 |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:cfm:wpaper:2421 |
| By: | Musakwa, M.T; Odhiambo, N.M |
| Abstract: | This study examined the causal relationship between ICT, income inequality and economic growth in South Africa using data from 1990 to 2021. Three measures of ICT were used in the study, namely fixed telephone lines subscription, mobile cellular subscriptions and the proportion of people using the internet to the total population. Employing the autoregressive distributed lag approach, the study found a unidirectional causal flow from income inequality to ICT across all measures of ICT employed. Another unidirectional causal flow from economic growth to ICT was found in the short run when ICT was measured by fixed telephone lines and mobile cellular. When internet access was used as a measure of ICT, a bidirectional causality between internet access and economic growth in the short run and a unidirectional causal flow from internet access to economic growth was confirmed. Across all three measures of ICT, no causal relationship was confirmed between economic growth and income inequality. The study points to the importance of economic growth in increasing ICT access and the crucial role that internet access has on economic growth in South Africa. Policy implications are discussed. |
| Keywords: | South Africa, inequality, information and technology (ICT), economic growth, autoregressive distributed lag |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:uza:wpaper:31545 |
| By: | Steven N. Durlauf |
| Abstract: | This essay provides a review of two important recent books on economic growth: How the World Became Rich by Mark Koyama and Jared Rubin and Slouching Towards Utopia, by J. Bradford DeLong. Each book is noteworthy for its erudition and breadth. I explore strengths and weaknesses of these books and make some proposals on new ways to conceptualize and study long run socioeconomic development. My discussion emphasizes the importance of contingency in determining long run inequalities across countries as well the potential for ideas from complexity theory to augment standard growth modelling. |
| JEL: | N1 O4 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32873 |
| By: | El Weriemmi, Malek; Bakari, Sayef |
| Abstract: | This study analyzes the impact of agricultural exports on economic growth in 30 upper-middle-income countries from 2004 to 2023 using World Bank data and static gravity model. The results indicate that agricultural exports positively influence economic growth, with a 1% increase in exports associated with a 0.13% rise in growth. Capital investment and labor also significantly contribute to economic progress. The findings suggest that enhancing agricultural export policies and infrastructure can effectively boost economic growth. Balancing trade policies to mitigate the negative effects of imports is also recommended. |
| Keywords: | Agricultural Exports, Economic Growth, Static Gravity Model, Upper Middle-Income Countries. |
| JEL: | F11 F14 O47 Q17 Q18 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121660 |
| By: | Bergh, Andreas (Department of Economics, Lund University, and); Bjørnskov, Christian (Department of Economics and Business, Aarhus University, and); Kouba, Luděk (Department of Economics,) |
| Abstract: | The discussion of the growth consequences of socialism has fulminated for a century, sparked off by the Calculation Debate in the 1920s and 30s, and has concerned the performance of the Soviet Union in the 1950s and the mixed development in the 1990s after communism collapsed in Central and Eastern Europe. We aim to inform these debates by providing an empirical assessment of how socialist economies performed across the second half of the 20th century. Using both neighbour comparisons as well as more formal empirical analysis of developing countries that turned socialist after independence, we derive a set of estimates of the degree to which the introduction of a planned socialist economy affects long-run growth and development. All analyses point towards an annual growth decline of approximately two percentage points during the first decade after implementing socialism. |
| Keywords: | Economic growth; Socialism |
| JEL: | O11 O43 P20 |
| Date: | 2024–08–27 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1499 |
| By: | Robinson, Z; De Beer, J |
| Abstract: | The purpose of this article is to take the lead and investigate value-added tax (VAT) revenue and economic growth in Southern Africa, especially referring to the Southern African Development Community (SADC). The objective of the study on which this article reports was to look at the relationship between VAT revenue and economic growth. The hypothesis was whether VAT revenue had an impact on economic growth or alternatively whether VAT revenue had no impact on economic growth. The effect of VAT on economic growth in different countries is unclear, and this has become an important empirical question. Our two-stage least squares model indicated that VAT revenue has a positive impact on economic growth. The same goes for the generalised method of moments (GMM) model. The corruption perception index also leads to a positive outcome on economic growth. The current study attempted to contribute to the surprisingly small body of academic economics research examining value-added tax in Southern African countries. Policymakers and revenue authorities should thus take note that room for higher VAT rates exists although these are already quite high in SADC. VAT is regarded as a regressive tax commonly burdening the poor. Alternatively, higher VAT rates and revenues on luxury goods commonly purchased by the wealthy might be an alternative option for further investigation in the future. Efficient and corruption-free service delivery in SADC can contribute to future VAT revenues supporting economic development in the region. |
| Keywords: | VAT revenue, SADC, economic growth |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:uza:wpaper:31547 |
| By: | El Weriemmi, Malek; Bakari, Sayef |
| Abstract: | This study examines the impact of agricultural exports and CO2 emissions on economic growth in 78 high-income countries from 2004 to 2023. Using a robust econometric framework that includes fixed-effects and random-effects models, the research finds that agricultural exports positively influence economic growth by generating revenue and enhancing competitiveness, while CO2 emissions negatively affect growth due to the associated environmental costs. The analysis, supported by the Hausman test and panel data techniques, highlights the need for balanced policy interventions that promote agricultural export growth while mitigating CO2 emissions. This study provides valuable insights for policymakers seeking to achieve sustainable economic development by integrating environmental considerations into economic strategies. |
| Keywords: | Agricultural Exports, CO2 Emissions, Economic Growth, Static Gravity Model, High-Income-Countries. |
| JEL: | F11 F14 O47 Q17 Q18 R11 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121697 |
| By: | Damioli, Giacomo (ISER, University of Essex); Van Roy, Vincent (European Commission, Joint Research Centre); Vertesy, Daniel (European Commission, Joint Research Centre); Vivarelli, Marco (Università Cattolica del Sacro Cuore) |
| Abstract: | Artificial intelligence (AI) is emerging as a transformative innovation with the potential to drive significant economic growth and productivity gains. This study examines whether AI is initiating a technological revolution, signifying a new technological paradigm, using the perspective of evolutionary neo-Schumpeterian economics. Using a global dataset combining information on AI patenting activities and their applicants between 2000 and 2016, our analysis reveals that AI patenting has accelerated and substantially evolved in terms of its pervasiveness, with AI innovators shifting from the ICT core industries to non-ICT service industries over the investigated period. Moreover, there has been a decrease in concentration of innovation activities and a reshuffling in the innovative hierarchies, with innovative entries and young and smaller applicants driving this change. Finally, we find that AI technologies play a role in generating and accelerating further innovations (so revealing to be "enabling technologies", a distinctive feature of GPTs). All these features have characterised the emergence of major technological paradigms in the past and suggest that AI technologies may indeed generate a paradigmatic shift. |
| Keywords: | Artificial Intelligence, technological paradigm, structural change, patents |
| JEL: | O31 O33 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17183 |