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on Economic Growth |
| By: | Claude DIEBOLT; Faustine Perrin |
| Abstract: | This chapter lays the theoretical foundations of long-run economic growth. After providing an overview of the three fundamental regimes that have characterized the process of development over the course of human history on the basis of the seminal work of Galor and Weil (2000), we review existing theories offering explanations of the different stages of development. In particular, we examine the predictions and underlying mechanisms of the traditional theories of economic growth and the theories of demographic transitions. We then show the relevance of the Unified Growth Theory to explain and capture the underlying mechanisms of the development process. Finally, we highlight the importance of integrating a gendered perspective in the study of long-run economic growth. |
| Keywords: | Economic History; Economic Development; Growth; Demographic Transition; Unified Growth Theory; Gender. |
| JEL: | A33 N1 O1 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ulp:sbbeta:2024-35 |
| By: | Hiroshi Inokuma (Director and Senior Economist, Institute for Monetary and Economic Studies, Bank of Japan (E-mail: hiroshi.inokuma@boj.or.jp)); Juan M. Sánchez (Senior Economic Policy Advisor, Federal Reserve Bank of St. Louis (E-mail: juan.m.sanchez@stls.frb.org)) |
| Abstract: | A slowdown in population growth causes a decline in business dynamism by increasing the share of old businesses. But how does it affect productivity growth? We answer this question by extending a standard business dynamics model to include endogenous productivity growth. Theoretically, the growth rate of the size of surviving old businesses is a "sufficient statistic" for determining the direction and magnitude of the impact of population growth on productivity growth. Quantitatively, this effect is significant across balanced growth paths for the United States and Japan. TFP growth in the United States falls by 0.3 percentage points because of the slowing in population growth between 1970 and 2060. The same driving force produces a significantly bigger response in Japan. Despite the significant long-run effect, we discover that changes in TFP growth are slow in reaction to population growth changes due to two short-run counterbalancing factors. |
| Keywords: | population growth, economic growth, firms dynamics, demographics, productivity, innovation, TFP |
| JEL: | E20 J11 O33 O41 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:ime:imedps:24-e-09 |
| By: | Bakari, Sayef |
| Abstract: | This study investigates the causal relationship between domestic investment and economic growth in Argentina over the period 1980-2022, utilizing cointegration analysis and a Vector Error Correction Model (VECM). The empirical results indicate that domestic investment has no significant long-term effect on economic growth. However, economic growth has a positive long-term impact on domestic investment, suggesting that growth stimulates investment rather than the reverse. In the short term, a bidirectional relationship exists between domestic investment and economic growth. These findings provide important policy implications for fostering sustainable economic development in Argentina. |
| Keywords: | Domestic Investment, Economic Growth, Argentina, VECM. |
| JEL: | C32 E22 O40 O54 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121799 |
| By: | Yang, Dongkyu |
| Abstract: | The idea that labor scarcity can induce economic development has been long hypothesized (Hicks, 1932; Habakkuk, 1962), but the evidence is scarce, especially on non-agricultural development. In this paper, I assess the role of the Second Great Migration (1940-1970) on the subsequent structural change in the American South between 1970 and 2010. Empirical results using shift-share instruments show that out-migration incentivized physical capital investment and capital-augmenting technical change, increasing capital and output per worker in both agriculture and manufacturing at least until 2010. Labor reallocated from agriculture to nonagriculture. I then develop and calibrate a dynamic spatial equilibrium model that allows substitution between factors of production, factor-biased technical change, and Heckscher–Ohlin forces in trade. The quantitative results indicate that the adjustments to the Second Great Migration could have contributed to 7% of the total decrease in agricultural employment between 1940 and 2010 in the South. The contribution analyses suggest that labor-capital substitution played a leading role in economic adjustment to the migration, with capital-biased technical change and the quasi-Rybczynski effect playing important supplementary roles. |
| Date: | 2024–09–04 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:dtxn4 |
| By: | El Weriemmi, Malek; Bakari, Sayef |
| Abstract: | This study aims to investigate the impact of CO2 emissions, domestic investment, and trade openness on economic growth in North African countries over the period 1998 to 2022. Utilizing a panel static gravity model, the results reveal that domestic investment exerts a negative influence on economic growth, while CO2 emissions and exports demonstrate a positive contribution. Furthermore, the analysis suggests that imports have an adverse, though statistically insignificant, effect on economic growth. The findings underscore the importance of fostering policies that promote exports and mitigate CO2 emissions, while carefully considering the potential negative implications of imports on the economic growth of North African countries. |
| Keywords: | CO2 Emissions, Domestic Investment, Trade Openness, Economic Growth, North African Countries, Panel Data, Gravity Model. |
| JEL: | C33 F43 O13 O55 Q56 |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122152 |
| By: | Popov, Vladimir; Konchakov, Roman; Didenko, Dmitry |
| Abstract: | The previous research with incomplete data revealed that zemstva expenditure on education per capita were higher in regions with low level of education, but these spending did not make much of a difference – human capital in these regions remained relatively low (Popov, Konchakov, Didenko, 2024). The results reported in this paper provide additional and more rigorous proof that zemstva activities and the increase in their spending for education in 1897-1913 contributed to the spread of primary education and to the decline in the inequality of the distribution of human capital not only between the regions |
| Keywords: | educational attainment, school enrollment, inequality, land distribution, growth |
| JEL: | D63 I24 J24 N93 R11 |
| Date: | 2024–09–21 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122162 |
| By: | Nicoletta Batini; Luigi Durand |
| Abstract: | We build a two-block general equilibrium model that accounts for Nature by including, alongside man-made capital, natural capital defined as a variety of ecosystem goods and services essential to economic activity. Natural capital is unevenly distributed, displays critical thresholds or ’tipping points’ beyond which the ecosystem is irreversibly altered, and contributes to the evolution of productivity. We show that: (1) when natural capital is abundant, it is optimal to deplete some and conserve some, but less depletion should occur if there is a critical threshold beyond which Nature is irreversibly altered; (2) subsidizing the conservation of Nature makes long-run growth stronger and more sustainable in Nature-rich and Nature-poor countries alike, but implies lower consumption globally in the short run. |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:chb:bcchwp:1014 |
| By: | Johannes Boehm; Thomas Chaney |
| Abstract: | What caused the end of antiquity, the shift of economic activity away from the Mediterranean towards northern Europe? We assemble a large database of coin flows between the 4th and 10th century and use it to document the shifting patterns of exchange during this time period. We build a dynamic model of trade and money where coins gradually diffuse along trade routes. We estimate the parameters of this model and recover time-varying bi-lateral trade flows and real consumption from data on the spatial and temporal distribution of coins. Our estimates suggest that technical progress, increased minting, and to a lesser degree the fall in trade flows over the newly formed border between Islam and Christianity contributed to the relative growth of Muslim Spain and the Frankish lands of northern Europe and the decline of the Roman-Byzantine world. Our estimates are consistent with the increased urbanization of western and northern Europe relative to the eastern Mediterranean from the 8th to the 10th century. |
| Keywords: | gravity models, international trade, market access, diffusion |
| Date: | 2024–09–05 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2030 |