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on Economic Growth |
| By: | Oded Galor; Marc Klemp; Daniel C. Wainstock |
| Abstract: | This study reveals the pivotal impact of the prehistoric out-of-Africa migration on global variation in the degree of cultural diversity within ethnic and national populations. Drawing on novel diversity measures—encompassing folkloric and musical traditions among indigenous ethnic groups, as well as norms, values, and attitudes in modern societies—an intriguing pattern emerges: societies whose ancestors migrated farther from humanity's cradle in Africa exhibit lower cultural diversity. These striking findings underscore: (i) the profound role of cultural dynamics in shaping the enduring effects of the out-of-Africa migration on social cohesion, innovativeness, and living standards; (ii) the origins of persistent global variations in cultural expressions within an increasingly interconnected world; and (iii) the roots of variations in societal adaptability to evolving economic and technological landscapes. |
| Keywords: | diversity, culture, out-of-Africa, folkloric diversity, musical diversity, social norms |
| JEL: | O10 Z10 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11524 |
| By: | Oded Galor |
| Abstract: | What sparked humanity’s leap from stagnation to prosperity? What lies at the core of inequality among nations? Unified Growth Theory explores the evolution of societies over the entire course of human history. It uncovers the universal wheels of change that have governed the journey of humanity, driven the growth process, and shaped inequality across the globe. The theory sheds light on two of the most fundamental mysteries surrounding this journey: (i) The Mystery of Growth—the origins of the dramatic transformation in human prosperity over the past two centuries, in the wake of millennia of near stagnation; and (ii) The Mystery of Inequality—the roots of the vast inequality in the wealth of nations. The theory suggests that forces operating in the distant past are central to the understanding of the uneven development across the globe and the design of effective policies that could promote economic growth and mitigate inequality. |
| JEL: | I25 J10 O10 O40 Z10 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33288 |
| By: | Matthew Turner; David N. Weil |
| Abstract: | Cities are often described as engines of economic growth. We assess this statement quantitatively. We focus on two mechanisms: a static agglomeration effect that makes production in bigger cities more efficient, and a dynamic effect whereby urban scale impacts the productivity of invention, which in turn determines the speed of technological progress for the country as a whole. Using estimates of these effects from the literature and MSA-level patent and population data since 1900, we ask how much lower US output would be in 2010 if city size had been limited to one million or one hundred thousand starting in 1900. These effects are small. If city sizes had been limited to one million people since 1900, output in 2010 would have been only 8% lower than its observed value. |
| JEL: | O40 R10 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33334 |
| By: | Chu, Angus C. |
| Abstract: | Early modern humans interbred with archaic humans. To explore this phenomenon, we develop a Malthusian growth model with hybridization in human evolution. Our hunting-gathering Malthusian economy features two initial human populations. We derive population dynamics and find that the more fertile population survives whereas the less fertile one eventually becomes extinct. During this natural-selection process, a hybrid human population emerges and survives in the long run. This finding explains why modern humans still carry DNA from archaic humans. A higher hybridization rate reduces long-run population size but raises long-run output per capita for the surviving populations in this Malthusian economy. |
| Keywords: | Ancient human interbreeding; natural selection; Malthusian growth theory |
| JEL: | N10 O13 Q56 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121218 |
| By: | Li, Defu; Bental, Benjamin; Tang, Xuemei |
| Abstract: | Acemoglu’s (2003) paper “Labor- and Capital-augmenting Technical Change” is a pioneering work that introduces a growth model with an endogenous direction of technical progress including microfoundations. At the steady-state equilibrium, the model indicates that there is only net labor-augmenting technical change, despite firms being able to pursue both labor- and capital-augmenting technological improvements. While this paper is a classic and original contribution to the field, it presents several significant shortcomings: (1) substantial mathematical errors in the proof of the main propositions; (2) the absence of a dynamic adjustment function for scientists across different innovation sectors, which is critical for the model; (3) neglect of the crucial condition required for the propositions to hold; (4) omission of important policy implications that diverge from existing literature; and (5) insufficient explanation of the intuition behind the model’s core conclusions. This comment identifies and addresses these shortcomings. |
| Keywords: | Acemoglu， Endogenous technical change， Direction of technical change， Balanced Growth Path, Relative income share of factors， Dynamic system |
| JEL: | E25 O14 O31 O33 |
| Date: | 2024–12–18 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123070 |
| By: | Challoumis, Constantinos |
| Abstract: | Growth in artificial intelligence is not merely a technological revelry; it is a transformative force reshaping our economic landscape. As we stand on the brink of unprecedented advancements, understanding the monumental trends shaped by AI will empower industries and individuals alike. This exploration into the intersection of AI and economic development unveils the intricate patterns of productivity enhancement, employment evolution, and market innovation, heralding an era where intelligence—both artificial and organic—catalyzes our financial realities. |
| Keywords: | AI, Economic Growth, money cycle, Economocracy |
| JEL: | E0 F4 F41 P0 P00 Z0 |
| Date: | 2024–12–09 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122925 |
| By: | Musibau, Hammed; Vespignani, Joaquin; Yanotti, Maria Belen |
| Abstract: | This paper explores the impact of education quality on economic growth in 37 OECD countries. We developed a new dataset that combines mixed-frequency data, including low-frequency data (every three years) from the Programme for International Student Assessment (PISA) and annual data from the World Development Indicators (WDI), covering the period from 2000 to 2018. Our study investigates the relationship between education quality and economic growth. We found that a 1% increase in educational quality contributes to an annual economic growth rate of 2.8%. This result is significantly higher than previous research, which, based on cross-sectional PISA data, reported growth rates ranging from 0.4% to 2.3%. |
| Keywords: | economic growth, education , PISA data |
| JEL: | E00 I2 O4 |
| Date: | 2024–12–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122859 |
| By: | Andreas Irmen |
| Abstract: | A balanced growth path that accounts for a decline in hours worked per worker approximates the evolution of today’s industrialized countries since 1870. This stylized fact is explained in an OLG-model featuring two-period lived individuals equipped with per-period utility functions of the generalized log-log type proposed by Boppart and Krusell (2020) and a neoclassical production sector. Technological progress drives real wages up and expands the amount of consumption goods. The value of leisure increases, and the supply of hours worked declines. Technological progress moves a poor economy out of a regime with low wages and an inelastic supply of hours worked into a regime with high wages and a declining supply of hours worked. The balanced growth path is unique and stable. In the high wage regime, the equilibrium difference equation is available in closed form. A balanced growth path with declining hours worked may also be obtained with endogenous technological progress as in Romer (1986). |
| Keywords: | technological change, comparative economic development, endogenous labor supply, neoclassical endogenous growth, OLG-model |
| JEL: | D15 J22 O33 O41 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11492 |
| By: | Carmen Camacho (Paris School of Economics, FR); Weihua Ruan (Purdue University Northwest, USA); Benteng Zou (DEM, Université du Luxembourg, LU) |
| Abstract: | We revisit the classical Ramsey (1928) model with time discounting and a linear production function, explicitly accounting for the inevitable limitations of tangible production factors, which must remain both finite and positive. By employing Pontryagin’s (1962) maximum principle, we transform state constraints into control constraints and provide a complete solution for all impatience rates under the linear production framework. While we classify the levels of impatience as established in the existing literature, we show that the behaviors associated with this threshold fundamentally differ when input limitations are considered - a factor previously overlooked. Our analysis extends beyond the literature’s traditional focus on agents with mild impatience, encompassing the entire spectrum of impatience. For highly patient agents, the policymaker prioritizes investment over consumption, ensuring the economy reaches its maximum capital level in finite time. Once this level is attained, consumption stabilizes indefinitely, achieving the golden rule trajectory - an outcome previously deemed unattainable under time discounting. Conversely, beyond the classical impatience threshold, capital and consumption decline over time. For agents with extreme impatience, we identify a second threshold where investment ceases entirely, leading to rapid depletion of capital and output. |
| Keywords: | Economic growth, Optimal Control, Dynamic Programming, Limited resources, Linear Production, Discount. |
| JEL: | C61 O44 Q15 Q56 R11 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:luc:wpaper:25-01 |