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on Economic Growth |
| By: | Galor, Oded; Klemp, Marc; Wainstock, Daniel C. |
| 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 |
| JEL: | O10 Z10 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19718 |
| By: | Hansson, Åsa (The Ratio Institute); Lundberg, Kristoffer (The Ratio Institute) |
| Abstract: | Declining fertility is reshaping the demographic outlook of advanced economies, yet its long-run macroeconomic consequences remain poorly understood. Using a dynamic microsimulation model calibrated to the Swedish economy, this paper examines how alternative fertility and migration scenarios affect population dynamics, dependency ratios, GDP, GDP per capita, and economic growth between 2025 and 2100. We find that lower fertility initially raises GDP per capita through a temporary demographic dividend, but these gains are eventually offset by population ageing, a shrinking labor force, and slower economic growth. Under current fertility rates, GDP in 2100 is projected to be around 13 percent lower than under a stable demographic scenario, while lower fertility combined with lower migration reduces GDP to less than half that level. The findings highlight the importance of demographic structure for long-run economic prosperity and sustainable public finances. |
| Keywords: | Fertility; demographic change; economic growth; welfare state; microsimulation |
| JEL: | E24 H55 J11 |
| Date: | 2026–08–10 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:ratioi:0391 |
| By: | Pau Insa-Sanchez (Department of Economics, Jaume I University, Spain); Alba Ruiz-Buforn (Department of Economic Analysis, University of Valencia, Spain); Jose-Ramon Ruiz-Tamarit (Department of Economic Analysis, University of Val`encia, Spain) |
| Abstract: | There is strong evidence that school quality, complemented by the quality of institutional arrangements, is one of the most important determinants of a country’s long-run economic growth. Thus, understanding the role that private and public schools play in this relationship is highly important for both scholars and policymakers. We develop an endogenous growth model to study the effects of different education financing modes on long-run economic growth. We distinguish between public and private education provision by explicitly modeling their differing levels of efficiency based on the distinct characteristics associated with each mode of financing, incorporating their intrinsic features as pointed out by the empirical literature and their predicted effects on quality. By allowing us to model a wide range of policy scenarios commonly observed in practice, our framework shows that, under a plausible characterization of the educational conditions prevailing in many Western countries, the interplay between institutional and socio-educational factors shaping the efficiency of both types of education gives public systems a greater advantage in promoting long-run economic growth. |
| Keywords: | economic growth, human capital, education, education financing |
| JEL: | O41 I22 I25 |
| Date: | 2026–07–19 |
| URL: | https://d.repec.org/n?u=RePEc:ctl:louvir:2026014 |
| By: | Garibaldi, Pietro; Turri, Enrico Duilio |
| Abstract: | The secular decline in the labor share and the long-run reduction in labor supply suggest that imperfect labor markets can play a role in long-run economic growth. This paper introduces oligopsony and oligopoly power in a Neoclassical Growth Model with superstar firms. The endogenous markdown of productivity on wages is the key driver of growth misallocation in the asymptotic balanced growth path. The model can be calibrated to simultaneously rationalize the joint trends of GDP growth, declining labor share and hours worked. For the US, the consumption equivalent loss with respect to the optimal growth path is calibrated around 7.5 percent. The theory is also coherent with growing markdown in the US estimated from a simple accounting exercise. An extension of the model with hand-to-mouth workers and capitalists delivers balanced growth with increasing inequality. While - in this context- proportional taxation distorts equilibrium labor supply, a raising minimum wage can restore efficient growth. |
| Keywords: | Monopsony; Growth; Misallocation |
| JEL: | O40 O41 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19652 |
| By: | Cavalcanti, Tiago; Fernandes, Leticia; Santos, Cezar; Rachter, Laisa |
| Abstract: | We investigate how changes in barriers to female labor force participation and the child penalty impact occupational decisions, human capital, fertility, and income. To this end, we develop a general equilibrium model with men and women, endogenous fertility, human capital investment, and occupational choice. By calibrating the model to US data, we estimate that changes in both gender distortions account for 30% of the US growth observed between 1960 and 2020. While the decline in the child penalty increases fertility, the reallocation of female labor from high-fertility to low-fertility occupations explains approximately 28% of the decline in the fertility rate during this period. Furthermore, reducing existing gender barriers would increase output per capita by 9% in 2020, enhance gender diversity across occupations, increase fertility, and ultimately improve female welfare. |
| Keywords: | Fertility; Occupational choice; Growth |
| JEL: | E25 J13 O10 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19886 |
| By: | Michael J. Callen; Gregory Levy; Saipremnath Muthukumaran; Jonathan Weigel; Noam Yuchtman |
| Abstract: | Explaining why some countries grow rich while others remain poor requires knowing how — and when — institutions change. A large body of research argues that institutional change often occurs at critical junctures: moments when multiple institutional futures are possible, including a return to the status quo. Yet most empirical work examines critical junctures only in retrospect, risking the omission of pivotal moments when institutions were in flux but ultimately remained unchanged. We develop a new empirical approach to detect critical junctures as they unfold. Our key insight is to understand critical junctures as moments of uncertainty about institutions, which provides a text classifier with a theoretically motivated object to detect in contemporaneous discourse. In this chapter, we apply this idea to the study of historical critical junctures using newspaper text as a rich source of information regarding contemporary beliefs about institutional uncertainty. We translate this insight into a measurement strategy by training a large language model-based classifier, which we apply to the Times of London archive — 11.95 million articles spanning 1800 to 2019 — while focusing our main empirical analysis on 120 years of reporting from 1900 to 2019. This produces the first long-run, text-based measure of institutional uncertainty grounded in the concept of critical junctures. Compared to established indices of geopolitical and economic risk, our measure innovates on several fronts: (i) it captures high uncertainty even in periods without formal institutional change, consistent with ex-ante definitions of critical junctures; (ii) it provides earlier signals of major global convulsions, such as World War I; (iii) it evaluates candidate critical junctures using a common ex ante measure; and (iv) it opens new avenues for studying how critical junctures shape institutions and long-run development. Today, our Times-based index suggests that institutional uncertainty in the US and UK is as elevated as it was in the early 1940s — a signal missed by other leading measures of risk. |
| Keywords: | institutional change, critical junctures, large language models |
| JEL: | P00 O10 D70 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12842 |
| By: | Ma, Debin; Rubin, Jared |
| Abstract: | This paper revisits the old theses of the contrasting paths to modernization between Japan and China. It develops a new analytical framework regarding the role of ideology and ideological change—Meiji Japan’s decisive turn towards the West pitted against Qing China’s lethargic response to Western imperialism—as the key driver behind these contrasting paths. Our framework and historical narrative highlight the contrast between Tokugawa Japan’s feudal, decentralized political regime and Qing China’s centralized bureaucratic system as a key determinant driving the differential patterns of ideological realignment. We argue that the 1894-95 Japanese naval victory over China could not be justified under the prevailing Imperial Chinese ideology and thus served as the catalyst for China’s subsequent ideological transformation, which occurred via borrowing Japan’s successful Meiji reforms of both institutions and ideology. Our analytical framework, developed from a comparative historical narrative, sheds new insights on the importance of ideology and ideological change for our understanding of political and economic change. |
| Keywords: | China; Japan; Economic development |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19573 |
| By: | Bohr, Clement; Mestieri, Marti; Robert-Nicoud, Frédéric |
| Abstract: | As countries develop, the relative importance of agriculture declines and economic activity becomes spatially concentrated. We develop a parsimonious model integrating structural change and regional disparities to jointly capture these phenomena. A key modeling innovation that ensures analytical tractability is the introduction of non-homothetic Cobb-Douglas preferences, which are characterized by constant unitary elasticity of substitution and non-constant income elasticity. As labor productivity increases over time, economic well-being rises, leading to a declining expenditure share on agricultural goods. Labor reallocates away from agriculture, and industry concentrates spatially, which further increases aggregate productivity: structural change and regional disparities are two mutually reinforcing outcomes and propagators of the growth process. |
| JEL: | D11 F11 O40 R10 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19766 |
| By: | Tham, Wing Wah; Baslandze, Salomé; Sojli, Elvira; Liu, Leo |
| Abstract: | This paper studies the interaction between process and product innovations and their distinct role in firm growth dynamics. We differentiate empirically and theoretically two types of process innovations: foundational processes that advance production technology and cost-reducing processes that enhance existing production efficiency. We develop an innovation model of product varieties with quality heterogeneity to illustrate how these innovations impact firm growth differently and highlight how process innovation induces product innovation. By analyzing millions of patent texts from 1900 to 2020, we classify innovations into product, cost-reducing process, and foundational process innovations. We find that foundational processes lead to sustained firm growth, especially through their effect on subsequent product creation. R&D-intensive firms focused on ``deep-tech'' innovations have an advantage in creating foundational processes, resulting in superior product quality. Using patents linked to FDA-approved drugs, we show that firms with a comparative advantage in creating foundational processes, due to greater knowledge and technological stock, tend to produce higher-value products. |
| Keywords: | Innovation; Patents; Firm growth; Process innovation |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19858 |
| By: | Gondauri, Davit; Mikautadze, Ekaterine |
| Abstract: | This study develops and empirically audits a cross-country panel-econometric framework for measuring how research productivity and academic intangible value become economically visible. Rather than treating academic output as a universal short-run GDP-growth multiplier, the study constructs a layered measurement architecture in which the Research Productivity Index (RPI), Academic Intangible Value Index (AIVI), and Academic Value Monetization Index (AVMI) distinguish research production, broader academic intangible value, and monetization-oriented academic capacity. Using an effective lagged estimation sample of 464 economy-year observations across 39 economies for 2011-2022, the analysis combines pooled OLS, fixed-effects and two-way fixed-effects models, lag structures, dynamic and directional checks, transmission-channel regressions, component-exclusion designs, threshold and heterogeneity tests, robustness checks, advanced econometric extensions, level-output models, and GDP-equivalent monetization algorithms. The results support a disciplined and conditional interpretation: the direct full-sample AVMI effect on GDP per capita growth is positive but statistically imprecise, while stronger evidence appears through observable monetization channels. AVMI is most clearly associated with high-technology export outcomes, and productivity growth provides a strong transmission link to GDP per capita growth. The study therefore reframes academic value as an auditable intangible economic asset whose monetization depends on innovation output, technology-market participation, absorptive capacity, productivity transmission, and country-specific regimes. By translating empirical evidence into gross and net monetized academic value, Academic Economic Value Added (AEVA), conversion ratios, counterfactual scenarios, and policy-dashboard diagnostics, the study contributes a reproducible framework for evaluating academic value without overstating causality or reducing knowledge systems to a single coefficient. |
| Keywords: | academic value monetization, research productivity, intangible academic value, knowledge economy, economic growth, high-technology exports, panel econometrics |
| JEL: | O32 O33 O47 C23 C43 I23 E22 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:341767 |
| By: | Corneo, Giacomo |
| Abstract: | History shows militarily dominant states that pursue imperialism, relying on their might to extort resources from weaker states. Occasionally, the latter revolt and the dominant state suffers some casualties. This paper explores imperialism along steady-growth paths. If the dominant state maximizes domestic welfare, it should eventually abandon imperialism because its safety costs asymptotically overrun its material benefits. To shed light on diametrically opposed historical records, I propose a model of endogenous ideology and war bias in which the political elite cares about self-image. If that concern is strong enough, the political elite gradually identifies with its country's mission of hegemony and imperialism persists. It is first driven by material concerns and later by ideal ones. Despite its divergent preferences, the population of a dominant state generally has little interest to oppose imperialism. |
| JEL: | H8 N4 O0 Z1 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19680 |