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on Economic Growth |
| By: | Harashima, Taiji |
| Abstract: | Many empirical studies support the necessity of public funding of science, but endogenous growth models do not necessarily do so. In this paper, I distinguish between investments in research and development (R&D) for “discovery” and “invention” in a framework of an endogenous growth model and show that there is the optimal ratio of discovery to invention in the sense that the highest productivity of producing knowledge is achieved. Because discovery generally does not generate profit, investments in R&D for discovery have to be publicly financed. Therefore, a government has the responsibility to maintain an optimal ratio of discovery to invention to keep the highest rate of endogenous economic growth. |
| Keywords: | Endogenous growth; Discovery; Production of knowledge; Public funding of science; R&D |
| JEL: | H41 O32 O33 O38 O40 |
| Date: | 2026–01–11 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127672 |
| By: | Luca Spinesi |
| Abstract: | Thispaperstudieshowinteractionsbetweenheterogeneoushouse- holdsintermsofsharesofwealthowned, sharesofhumancapitaland sharesofconsumptioninuencewealthandincomeinequalityinanin- novationdrivengrowthmodelwithendogenousmarketstructure.Inno- vationandworkforceskillupdatingjointlydeterminelong-runeconomic growth, whilepatentpolicygeneratesnon-monotonicdistributionalef- fects.Moderateincreasesinpatentbreadthraise rmsvaluationsand dampenswealthandincomeinequality, whereasstrongpatentprotection increaseswealthandincomeinequality.Incontrast, greatertimedevoted toskillupdatingunambiguouslyfostersinnovationandlong-rungrowth, butalsoincreaseswealthandincomeinequality.Themodeliscalibrated toU.S.dataandshowntoreplicatekeyfeaturesofthejointevolutionof wealthandincomeinequalityovertheperiod19 89-2019. |
| Keywords: | Innovation, Endogenous market structure, Human capital, Income and Wealth |
| JEL: | O30 O40 D43 J24 |
| URL: | https://d.repec.org/n?u=RePEc:rtr:wpaper:0290 |
| By: | Naudé, Wim (RWTH Aachen University) |
| Abstract: | This paper provides an explanation of the theory of innovation and economic growth, in light of the 2025 Bank of Sweden Prize in Memory of Alfred Nobel, awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt. Their scholarship is critically evaluated, and the useful, less useful, and most problematic aspects highlighted. The verdict is that it is largely a collection of anthropocentric stories of innovation and growth. It avoids spelling out why sustained growth is desirable, it reduces innovation’s ultimate goal to the pursuit of economic growth, it is based on a deep seated notion of human exceptionalism, and it promotes directed technical change - based on the assumption that all resources are fungible and can be substituted - as a way to sustain economic growth without causing environmental destruction. Their analysis of growth is useful for highlighting the importance of scientific knowledge, for showing that creative destruction can be more destructive than creative, and that economic growth will only be sustained under very special conditions. However, the failure to address energy remains a glaring gap. For economics to become more useful, it would require becoming an Earth Systems Science based on biocentric holism. |
| Keywords: | innovation, economic growth, technology, sustainability, energy |
| JEL: | O31 O33 J11 J24 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18408 |
| By: | Fabricio Jose Missio (Cedeplar/UFMG) |
| Abstract: | Why do some countries experience sustained economic growth and remain distant from the technological frontier? This article argues that underdevelopment should not be understood simply as historical backwardness or insufficient growth, but rather as the outcome of a specialized, heterogeneous productive structure dependent on external technological progress. Drawing on the Latin American structuralist tradition, the paper shows how the uneven diffusion of technology in the international system conditions distinct patterns of productive insertion. In peripheral economies, industrialization may occur in an incomplete form, preserving external dynamic centers and limiting the domestic generation of innovation. The central argument is that when the productive base does not undergo deep and articulated transformation, economic growth tends to reproduce external vulnerability, internal heterogeneity, and limited technological convergence. |
| Keywords: | Structural change; Productive structure; Underdevelopment; Incomplete industrialization; Centre–periphery |
| JEL: | O11 O14 O33 F63 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:cdp:texdis:td694 |
| By: | Ramoutar, Richard |
| Abstract: | This paper re-examines the role of culture and religion in explaining cross-country differences in economic performance, using data from five waves of the Integrated Values Survey (IVS) — which merges the World Values Survey (WVS) and the European Values Study (EVS) — covering the period 1994- 2020. We constructed a cultural index using Principal Component Analysis (PCA) to achieve this goal. This study employs seven leading indicators from the WVS and EVS surveys on cultural development, including control, trust, respect, obedience, and identity. Further, the Generalized Method of Moments (GMM) system estimation was adopted. The findings confirm a significant positive impact of culture and religion on economic growth. These findings support the view that cultural and religious factors should be treated as core elements of the development process, alongside physical and human capital, institutions, and technological determinants. |
| Keywords: | Culture, Religion, Economic Growth, PCA, System GMM. |
| JEL: | O1 O11 |
| Date: | 2025–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127356 |
| By: | Kazumichi Iwasa (Research Institute for Economics and Business Administration, Kobe University, JAPAN); Kazuo Nishimura (Research Institute for Economics and Business Administration and Center for Computational Social Science, Kobe University, JAPAN) |
| Abstract: | This paper examines the relationship between dynamic stability and the presence of Giffen goods in a standard two-sector growth model. We show that a steady state may take the form of a saddle point even when a labor-intensive good becomes a Giffen good at the steady state.The results highlight that the stability of equilibria is shaped not by the presence of Giffen behavior per se, but by the strength of the income effect associated with inferior goods. When this effect is suffciently large, steady states can become unstable; otherwise, stability is preserved. These findings clarify the conditions under which Giffen behavior interacts with dynamic equilibria, and emphasize the central role of income elasticity in determining stability outcomes. |
| Keywords: | Giffen goods; Dynamic stability; Two-sector model; Income elasticity |
| JEL: | D11 E13 E21 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:kob:dpaper:dp2026-07 |
| By: | Sagiri Kitao; Kanato Nakakuni |
| Abstract: | Advanced economies have experienced a sharp decline in fertility and marriage rates over the past several decades, alongside rising educational attainment and substantial shifts in women’s time allocation. To investigate the forces behind these trends, we develop a quantitative general equilibrium model with endogenous marriage, fertility, educational investment, and women’s time use. The model incorporates factor-neutral, skill-biased, and gender-biased technological change, which jointly determine the wage structure and the trade-offs households face. Calibrating the model to Japan, we find that skill- and gender-biased technological change jointly account for about 30% of the decline in fertility between 1970 and 2020, with technologies favoring female labor supply explaining most of this effect. These forces operate through higher opportunity costs of childrearing and weaker incentives to marry. Counterfactual experiments show that ignoring the joint determination of education and time allocation leads to substantial misattribution of the drivers of fertility decline. Together, the results demonstrate that understanding long-run demographic change requires a unified framework that integrates these interconnected household decisions. |
| Keywords: | Fertility, Marriage, Home Production, Women’s Time Allocation, Skill-biased Technological Change, Gender-biased Technological Change, Japan. |
| JEL: | D10 E10 J10 O11 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_735 |
| By: | Minchung Hsu (National Graduate Institute for Policy Studies, Tokyo, Japan); Samuel Leyton (Sophia University, Tokyo, Japan) |
| Abstract: | This study builds on recent research on international comparisons of wage-experience profiles (eg. Lagakos et al., 2018, and Jedwab et al., 2023), which finds that wage growth is significantly lower in developing economies. We aim to provide a deeper insight into this issue. Using rich longitudinal data from Chile, the Social Protection Survey (EPS) linked to administrative pension contribution records, we construct precise measures of formal and informal work experience and estimate their distinct contributions to wage dynamics. This dataset, the longest available panel for a developing country, allows for a detailed analysis of how sector-specific experiences influence life-cycle wage growth. We undertake a life-cycle framework with human capital accumulation to guide our empirical strategy. We find that both the speed of human capital accumulation and the return to human capital are significantly lower with informal employment, while the wage growth with formal employment experience is comparable to that in developed economies. We also find that workers in formal jobs are far more likely to receive on-the-job training, helping to explain the divergence in human capital accumulation across sectors. Furthermore, the estimation framework provides a foundation for structural life-cycle models that incorporate sector-specific human capital accumulation and endogenous employment transitions between formal and informal sectors. |
| Keywords: | Labor informality; life-cycle wage growth; human capital |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ngi:dpaper:25-14 |