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on Economic Growth |
| By: | Kenzhegaliyeva, Zhaniya |
| Abstract: | This paper analyzes the postwar economic growth of Germany and Japan using the Solow Growth Model and its extensions. By examining historical data on savings, investment, capital accumulation, and labor force dynamics, the study identifies the mechanisms behind rapid convergence toward steady-state output. Extending the model to incorporate human capital and labor heterogeneity, it highlights the role of mass education and gender inclusion in sustaining growth. Differences in female labor participation across East and West Germany and Japan are analyzed using the feminization U-hypothesis. The paper also considers political background and cultural factors shaping labor and capital outcomes. It concludes with policy recommendations for modern developing economies, drawn from the postwar experiences of Germany and Japan, emphasizing inclusive labor use, human capital investment, institutional credibility, and capital deepening. |
| Keywords: | economic miracle; Solow Growth Model; human capital; gender and development; catch-up growth; labor force participation |
| JEL: | N3 N34 N35 O1 O4 O47 O52 O53 O57 |
| Date: | 2025–07–06 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126039 |
| By: | Wakamatsu, Naoyuki |
| Abstract: | The paper argues that Senior was still under the influence of Ricardo’s economics from the point of view of economic growth. Senior generally emphasised a sustainable growth of economy brought by the prudential check to population and the technological progress in agriculture, but it depended on wise institutions. However, on the other hand, he was familiar enough with Ricardian growth which enabled him to develop the initial effect of taxes, also existed in Ricardo, into the long-term consequences on the stationary state. In this sense, Senior was the orthodox successor of Ricardo, which means that his growth theory should be understood in the continuity with Ricardo’s growth theory. |
| Keywords: | Nassau Senior; David Ricardo; tithe; economic growth; stationary state |
| JEL: | B12 B31 |
| Date: | 2025–08–30 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125970 |
| By: | Blossey, Nils; Haffert, Lukas; Stoetzer, Lukas |
| Abstract: | Historical industrial centers have shifted to the right but have done so at different speeds and intensities. We argue that this variation can be explained by differences in the historical industrialization process. Communities that industrialized later and more intensively realign more toward the radical right today. This is because the built environment shaped by the original industrialization drives demographic persistence and neighborhood disadvantage. To examine our argument, we study the effects of nineteenth-century coal mining in Germany's Ruhr area. We match the geolocation of over 1, 000 mining shafts, historical plant-level employment data, and the spread of company housing with contemporary electoral results at the neighborhood level. For identification, we exploit the depth of coal deposits that governed the adoption of deep-shaft mining. The findings demonstrate how the path of economic development influences voting in the long run. |
| Date: | 2025–10–16 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:tswm7_v1 |
| By: | Joerg Bibow |
| Abstract: | This paper revisits Keynes's (1930) essay titled "The economic possibilities for our grandchildren." We discuss the three broader trends identified by Keynes that he expected would come to characterize the socio-economic evolution of advanced countries under individualistic capitalism: first, continued technological progress and capital accumulation as the main drivers of exponential growth in economic possibilities; second, a gradual general rebalancing of life choices away from work; and third, a change in the code of morals in societies approaching an envisioned stationary state of zero net capital accumulation in which mankind has solved its economic problem and enjoys a lifestyle predominantly framed by leisure rather than disutility-yielding work. We assess actual outcomes by 2023 and attempt to peek into the future economic possibilities for this generation's grandchildren. |
| Keywords: | Keynes; technology; growth; work; leisure; capitalism |
| JEL: | B22 B31 E20 J22 N10 Q40 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1038 |
| By: | Nam, Jaejun; Kim, Nayeon |
| Abstract: | We examine the role of knowledge spillovers in shaping economic growth in developing countries, with a focus on their limitations in promoting convergence with advanced economies. Extending Romer (1986) and the North–South model, we construct a theoretical model in which government-funded knowledge accumulation drives long-run growth, while developing countries benefit from costless technology diffusion from advanced economies. Within this framework, we derive steady states for each economy and analyze how policy choices—such as taxation, savings, and technology protection—affect the growth trajectory of both economies through the spillovers. We then test the model’s predictions, setting the United States as the technological frontier. The analysis utilizes fixed-effects regression and incorporates foreign direct investment inflows and imports from the U.S. as proxies for openness to spillovers. Our results suggest that knowledge spillovers alone are insufficient for convergence, requiring substantial domestic investment by developing countries. This highlights the structural challenges these countries face in catching up to advanced economies. Additionally, technology protection ensures the long-term economic dominance of developed countries, but only when paired with significant domestic investment. Finally, we empirically demonstrate a complementary relationship between openness and technological disparity in determining the magnitude of spillovers, lending further support to our findings. |
| Keywords: | Knowledge Spillovers, Romer (1986), North–South Framework, Endogenous Growth Model, Technology Protection |
| JEL: | F43 O33 O41 |
| Date: | 2025–10–04 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126362 |
| By: | Jesus Felipe; John McCombie |
| Abstract: | This paper offers a retrospective view of the key pillar of Solow's neoclassical growth model, namely the aggregate production function. We review how this tool came to life and how it has survived until today, despite three criticisms that undermined its raison d'etre. They are the Cambridge Capital Theory Controversies, the Aggregation Problem, and the Accounting Identity. These criticisms were forgotten by the profession, not because they were wrong but because of the key role played by Robert Solow in the field. Today, these criticisms are not even mentioned when students are introduced to (neoclassical) growth theory, which is presented in most economics departments and macroeconomics textbooks as the only theory worth studying. |
| Keywords: | Accounting Identity; Aggregation Problem; Cambridge Capital Theory Controversies; Solow |
| JEL: | B22 B31 B32 B41 E13 E25 |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1046 |
| By: | Ramaharo, Franck M. |
| Abstract: | This paper examines the asymmetric relationship between tourism development and economic growth in Madagascar using the Nonlinear Autoregressive Distributed Lag (NARDL) model and annual data spanning 1984-2024. Our analysis reveals a statistically significant, long-run asymmetric impact. Negative changes in tourist arrivals exert a substantially stronger adverse effect on economic growth than the positive effect of equivalent increases. Furthermore, we investigate both symmetric and asymmetric causal linkages between tourism and economic growth. The symmetric causality analysis detects neither bidirectional nor unidirectional causality. This result, therefore, provides support for the neutrality hypothesis in Madagascar. However, the asymmetric causality test uncovers unidirectional effects running from economic growth to tourism. Specifically, positive shocks to economic growth Granger-cause subsequent negative shocks to tourism, while negative shocks to economic growth Granger-cause subsequent positive shocks to tourism. This pattern, which is consistent with the asymmetric conservation hypothesis, along with our empirical findings, collectively cautions against treating tourism as a primary engine of economic growth in Madagascar. Instead, our results highlight tourism's vulnerability to macroeconomic and financial instability and underscore the need for policies that stabilize the broader economy to ensure sustained tourism performance. |
| Keywords: | tourism development; economic growth; financial development; Madagascar; asymmetric analysis; Nonlinear Autoregressive Distributed Lag modeling |
| JEL: | L83 O16 O47 |
| Date: | 2025–10–08 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126422 |
| By: | Guerrazzi, Marco |
| Abstract: | In this paper, I develop a two-sector growth model with endogenous labour supply in which labour is employed only in the production of investment goods. From a theoretical point of view, I show that no matter the shape of the technology to produce consumption goods, a convex technology in the sector of investment goods is necessary and sufficient for a meaningful stationary solution and the determinacy of equilibrium trajectories. In addition, from a numerical perspective, I show that a calibrated version of the model relaxes the complementarity between the propensity to consume and to save and it is also able to provide a rationale for the procyclical patterns of the relative price of capital goods and the real wage. |
| Keywords: | Capital accumulation; Investment; Consumption; Two-sector growth model, Relative price of capital goods, Real wage. |
| JEL: | C61 E21 E22 O11 |
| Date: | 2025–09–28 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126299 |
| By: | Marc Bara |
| Abstract: | This note extends Restrepo (2025)'s model of economic growth under AGI by incorporating Moravec's Paradox -the observation that tasks requiring sensorimotor skills remain computationally expensive relative to cognitive tasks. We partition the task space into cognitive and physical components with differential automation costs, allowing infinite costs for some physical bottlenecks. Our key result shows that when physical tasks constitute economic bottlenecks with sufficiently high (or infinite) computational requirements, the labor share of income converges to a positive constant in the finite-compute regime (rather than zero). This fundamentally alters the distributional implications of AGI while preserving the growth dynamics for cognitive-intensive economies. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.24466 |
| By: | Giorgio Giorgi (University of Pavia); |
| Abstract: | We give a survey of some mathematical issues concerning linear joint production models, usually described by a pair of nonnegative matrices (A, B), not necessarily square. The celebrated von Neumann growth model is not included in the present paper. In the last section we review some approaches to the generalization of the Perron-Frobenius problem for a pair (A, B), i. e. the problem Ax = λBx. |
| Keywords: | Linear joint production models, generalized Perron-Frobenius theorem. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:pav:demwpp:demwp0232 |
| By: | L. Randall Wray; Eric Lin |
| Abstract: | This paper looks at the relationship between government budget deficits and the growth rate of GDP. While orthodox economic theory offers several reasons to believe that growing deficits might be associated with slower growth, and would ultimately be unsustainable, Keynesians assert that deficits could stimulate growth--at least in the short run--implying the relation between deficits and growth could be positive. Modern Money Theory, adopting Godley's sectoral balance approach, Lerner's functional finance approach, and Minsky's theory of financial instability takes a more nuanced approach. Historical data for a number of countries is presented, showing that there is no obvious relation between the deficit ratio and economic growth over long time periods. However, there is a predictable path of the relationship over the course of the business cycle for all countries examined. |
| Keywords: | government budget deficit; deficit ratio; GDP growth rate; MMT; sectoral balance; functional finance; Wray curve; automatic stabilizer; Godley; Lerner |
| JEL: | F30 N10 N14 P16 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1055 |