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on Economic Growth |
| By: | Nicola Fontana (Department of Economics, Trinity College Dublin); Marco Manacorda (School of Economics and Finance, Queen Mary University of London); Gianluca Russo (CUNEF University); Marco Tabellini (Business, Government, and International Economy unit, Harvard Business School) |
| Abstract: | In this paper, we study the long-run effects of emigration on economic development. We consider the case of historical mass migration from Italy between 1880 and 1920, when more than 10 million people left the country. We exploit variation in access to information about opportunities abroad to derive an instrument for outmigration at the municipality level. We find that areas with higher historical emigration are poorer, less educated, and less densely populated at the turn of the 21st century. These effects emerged early and persisted, as emigration led to sustained depopulation that, combined with declining fertility and lower human capital investment, constrained the structural transformation from agriculture to manufacturing and services. |
| Keywords: | Emigration; long-run economic development |
| JEL: | F22 N33 O15 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:tcd:tcduee:tep1125 |
| By: | Masashige Hamano (Waseda University, School of Political Science and Economics); Yuki Murakami (Waseda University, Graduate School of Economics) |
| Abstract: | This paper highlights the potential for decoupling economic growth from CO2 emissions under strong policy, while providing a tractable framework for analyzing the long-run global green transition. We develop a dynamic stochastic general equilibrium model with heterogeneous firms: green firms abate emissions at higher costs, while brown firms do not. Emissions reduce aggregate productivity but are not internalized in competitive equilibrium. Using global data from 1981 to 2022, we calibrate the model to match observed trends in GDP and emissions. The analysis delivers three main findings. First, while emissions continue to rise, the share of green firms grows over time. Second, faster technological progress amplifies the growth–emissions trade-off, whereas slower progress attenuates it. Third, welfare analysis shows that the optimal emission tax must be substantially higher than current levels, though its role is moderated when combined with abatement innovation. Together, these results underscore the importance of policy in sustaining growth while mitigating environmental externalities. |
| Keywords: | Climate change, Green transition, Heterogeneous firms, Economic growth, DSGE models |
| JEL: | Q54 Q58 E32 F44 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:wap:wpaper:2522 |
| By: | Grigoryan, Karen; Chapanyan, Taguhi |
| Abstract: | This article examines the impact of government spending, as well as current and capital expenditures, on economic growth. Current and capital expenditures have distinct roles in shaping a countries' economic trajectory. For one hand, current expenditures are essential for maintaining short-term economic stability and supporting immediate needs and, while on the other hand, capital expenditures, contributes to long-term economic growth by enhancing productivity, improving efficiency, and fostering innovation. The article identifies the necessary balance between these spending categories to maximize both short-term economic stability and longterm growth potential. Furthermore, the article also discussed how Armenia's government spending can align with global initiatives such as the European Union's Global Gateway strategy, which aims to foster smart, clean, and secure connections in key sectors like digital, energy, and transport. This study uses the Vector Autoregression (VAR) and least squares (LSM) models to analyze the relationships of government revenues, public debt, total government expenditures, as well as current and capital expenditures, with economic growth. The model results indicate that increase of government revenues leads to increase of economic growth, and government expenditures. At the same time increase of economic growth contributes to an increase of government expenditures, while increase of public debt suppresses economic growth. |
| Keywords: | government expenditure, economic growth, current expenditure, capital expenditure, global gateway, vector autoregressive model |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:opodis:328269 |
| By: | Leander Heldring |
| Abstract: | This chapter reviews the origins, evolution, and modern forms of government, and proposes a research agenda. It contends that rather than being a homogeneous form of patrimonialism, early government was diverse and, at times, fostered order and prosperity. Its subsequent development did not follow an ‘evolutionary’ path to rational-legal government but was characterized by innovation and frequent collapse. Successful modern states do not all look alike, but follow several different models, as historical states have done. |
| JEL: | D74 H10 N20 N40 O43 P16 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34370 |
| By: | Marvin Suesse (Department of Economics, Trinity College Dublin); Morten Jerven (Norwegian University of Life Sciences) |
| Abstract: | An influential strand of literature within economics and economic history called ‘persistence studies’ argues that low material living standards in African countries today were determined by institutional choices made in the past. However, the lack of consistent annual data on GDP per capita or institutional variables has meant that this literature has been largely silent as to whether their proposed relationships hold throughout the period it studies. This has made persistence studies vulnerable to criticisms of making leaps of faith or contributing to a ‘compression of history’. Here, we draw on a data set of tax revenues for African polities for the period 1900-2015, with which we proxy the institutional capacity of a state. We then test whether some of the most influential determinants stressed in the persistence literature exert a consistent effect on our measure of institutions. Our findings suggest that the effect of population density and colonizer identity on institutions is not persistent. We find mixed results for precolonial centralization and ethnic fractionalization, while results for slave exports and settler mortality are more in accordance with theory. Overall, our results support the view that historical persistence should be measured, not simply assumed. |
| Keywords: | Persistence; Institutions; Africa; Settler mortality; Slave trades; Fiscal capacity |
| JEL: | O11 O55 N17 H30 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:tcd:tcduee:tep1225 |
| By: | Mr. Matthieu Bellon; Ross Warwick |
| Abstract: | Can simply exceeding a critical tax-to-GDP threshold bring about an accelerated trajectory of economic growth and development in a country? We conduct new event studies and exploit a richer dataset to revisit Gaspar, Jaramillo and Wingender’s 2016 “tax tipping point” result. Both with their regression discontinuity approach and a dynamic difference-in-differences estimation, we find that cumulative growth over 10 years increases by 10 percentage points when a country’s tax-to-GDP ratio increases above a 10 percent threshold. Further, we show that crossing the threshold coincides with the beginning of significant improvements in measures of a country’s financial development, government effectiveness, legal framework, and governance. Event studies additionally reveal that only transformational episodes of tax increases above the threshold deliver these gains: episodic crossings that fail to bring tax revenues durably above the threshold and that don't coincide with improvements in financial development and government effectiveness yield fleeting gains. Our results suggest that a minimal tax capacity is necessary for growth but emphasize that only a sustained tax increase associated with other developmental progress is sufficient. |
| Keywords: | Income per Capita; Taxation; Development; Multiple Equilibria; Event Study |
| Date: | 2025–10–03 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/203 |