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on Economic Growth |
| By: | Riku Watanabe (Department of Economics, Kagawa University); Ken Tabata (School of Economics, Kwansei Gakuin University) |
| Abstract: | This study introduces endogenous resource-substituting innovation into a variety-expanding endogenous growth model with polluting non-renewable resources. The resulting task-based framework highlights the trade-off between resource-using variety-expanding innovation and resource-substituting innovation. We examine how subsidies for these two types of innovation affect economic growth and welfare, and how environmental policies that slow resource extraction and mitigate pollution shape these effects. Subsidies for new-variety R&D promote growth through faster variety expansion but reduce it through greater reliance on resource extraction, reflected in a lower share of firms adopting resource-substituting production methods and higher resource intensity in aggregate production. Subsidies for resource-substituting innovation have the opposite effects. Calibrating the model, we find that raising subsidies for new-variety R&D is more likely to improve welfare in resource-rich economies, whereas raising subsidies for resource-substituting innovation is more likely to improve welfare in resource-poor economies. We also find that more stringent environmental policies that conserve resources and mitigate pollution strengthen the welfare gains from subsidies for resource-substituting innovation, while weakening those from new-variety R&D subsidies. |
| Keywords: | Non-Renewable Resources, Resource-Substituting Innovation, R&D-based Growth |
| JEL: | O31 O44 Q55 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:kgu:wpaper:314 |
| By: | O'Connor, Kelsey (STATEC Research – National Institute of Statistics and Economic Studies) |
| Abstract: | The Easterlin Paradox refers to the apparent contradiction between the cross-sectional and time-series relationships between GDP per capita and evaluative happiness – at a point in time, countries with greater GDP per capita are on average happier, but over time, long-run GDP growth does not correlate meaningfully with long-run happiness growth. Yet not everyone agrees. After more than fifty years since Easterlin's original article, the Paradox remains controversial and is frequently misunderstood. This article reviews the evolution of the Easterlin Paradox and briefly discusses its modern definition, explanations, best practices for testing, empirical extensions, and common misconceptions and critiques, with particular attention on methodology. Recent evidence indicates there is a broad range of long-run happiness changes, but these changes do not meaningfully correlate with long-run GDP growth rates, even in less developed countries. The implications are part of why the Paradox is so controversial. Economic growth alone does not constitute development or societal progress. In Easterlin’s words, it is time to move on [beyond GDP] and discover what explains why happiness grew in some countries and not others. |
| Keywords: | Easterlin Paradox, economic growth, income, happiness, life satisfaction, subjective well-being, development |
| JEL: | I31 D60 O10 O5 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18874 |
| By: | Jordan Roulleau-Pasdeloup |
| Abstract: | I consider a neoclassical growth model with a constant absolute risk aversion (CARA) utility function and derive a global closed form approximation that is arbitrarily precise as the discount rate $\rho$ is close to the population growth rate $n$. I use it to show that the consumption function is strictly concave and that countries can have two different paths converging to the steady-state: front-loading and back-loading. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.20405 |
| By: | Anurag Sau; Sujayan Gupta; Uttam Ghosh; Sabyasachi Bhattacharya |
| Abstract: | The relationship between investment policy associated with species growth profile is essential in seeking the most appropriate strategy for a policymaker. Balancing maximum profit with the sustainability of species remains a central issue in both ecological and economic contexts. This study presents a comparative analysis of two interest principles, annuity and compounding, within the framework of optimal control. Various investment policies are examined from the perspective of capital theory, incorporating concepts such as future value, accumulation function, and force of interest, each contributing to the formulation of an optimal control strategy. Our analysis is based on a one dimensional logistic model incorporating linear harvesting. Key parameters include the species growth rate and interest rate, and optimality is evaluated with respect to these variables. Using Pontryagins Maximum Principle, we derive the optimal harvesting policies under both discounting laws and characterize the resulting steady state equilibria. The principal finding indicates that for species with low intrinsic growth rates and low annual interest rates, the annuity law of interest yields optimal outcomes. Conversely, for any annual interest rate, species exhibiting moderate or high growth rates maximize profit under the compound law of interest. The study also addresses maximum net revenue and optimal strategies for varying growth rates under each interest law. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.06123 |
| By: | Aydan Dogan; Ozgen Ozturk |
| Abstract: | We study how the financing of innovation shapes the transmission of monetary policy to productivity. Using US firm balance-sheet data matched to loan contracts, we show that contractionary monetary policy shocks reduce cash flow similarly across firms but lower R&D more among those without access to cash flow-based borrowing, where credit is extended against earnings rather than collateral. In a New Keynesian endogenous growth model with heterogeneous access to external finance, we show that a 25 basis point tightening lowers output persistently by 0.12%. Extending access to all firms reduces this loss by one third. The loss falls disproportionately on firms without access, which are younger and produce more and higher-quality patents. |
| JEL: | E22 E32 E44 E52 G32 |
| Date: | 2026–09–04 |
| URL: | https://d.repec.org/n?u=RePEc:boe:boeewp:023581 |
| By: | Hannah Engljaehringer (Institute of Economics and L'EMbeDS, Scuola Superiore Sant'Anna, Pisa, Italy); Mauro Napoletano (Université Côte d'Azur, CNRS, GREDEG, France; OFCE, Sciences Po, France; Institute of Economics and L'EMbeDS, Scuola Superiore Sant'Anna, Pisa, Italy); Elisa Palagi (Institute of Economics and L'EMbeDS, Scuola Superiore Sant'Anna, Pisa, Italy); Andrea Roventini (Institute of Economics and L'EMbeDS, Scuola Superiore Sant'Anna, Pisa, Italy; OFCE, Sciences Po, France) |
| Abstract: | The paper develops an agent-based model to study the complex interactions between access to education, inequality and economic growth. We simulate a “meritocratic” economy where households’ ability to obtain (costly) education affects their future productivity and, in turn, their labor compensation. Simulation results show that in an economy characterized by unequal access to education and where workers are rewarded according to their productivity, income and wealth inequality surges, social mobility falls and economic growth is gradually eroded. This shows the emerging costs of meritocracy. Conversely, an institutional framework characterized by broad educational access and less meritocratic compensation schemes can foster higher and more inclusive growth. This can also be achieved introducing a policy which subsidizes education for households at the lower end of the wealth distribution. These results underscore the critical role of institutional arrangements and pre-distributive policies in promoting both equity and long-term economic performance. |
| Keywords: | Income inequality; Education; Meritocracy; Social mobility; Pre-distribution; Economic growth; Agent-based computational economics |
| JEL: | C63 D31 E21 I24 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2026-20 |
| By: | Eleonora Guarnieri; Ana Tur-Prats |
| Abstract: | Why do some cultures go extinct while others prevail? In this paper, we show that a society's risk of cultural extinction, proxied by language loss, is shaped by its ancestral gender norms and by how these norms differ from those of competing cultures. Using the Ethnologue and the Male Dominance Index for a global sample of languages, we start by showing that languages from more gender-equal societies face a higher likelihood of extinction than those from male-dominant societies. We propose a conceptual framework in which male-dominant societies are more expansionist via two channels: (i) military capacity sustained through surplus extraction, and (ii) demographic pressure through women's specialization in domestic and reproductive labor. As a result, they expand at the expense of more gender-egalitarian groups. We test this prediction in two empirical settings. Leveraging European colonization as a natural experiment, we find that Indigenous societies with more gender-equal norms than their colonizers are more vulnerable to cultural extinction. We examine alternative pre-colonial societal arrangements and find that cultural extinction is best explained by asymmetries in male dominance rather than in hierarchy or dominance more broadly. Exploiting local variation in neighboring groups' gender structure across Africa, we further show that languages from gender-egalitarian societies are less likely to survive in grid cells located close to male-dominant neighbors, with military capacity and population pressure predicting language expansion across the continent. |
| Keywords: | cultural diversity, language extinction, gender norms, Inter-group contact |
| JEL: | Z10 O10 F54 J16 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12968 |
| By: | Sandambi, Nerhum |
| Abstract: | On this approach analysed for example the Impoverishing Growth on majority developing Countries, particularly on some african Countries. This approach helped to understand particularly how for example the high level of impoverishing growth on developing Countries helped to create a weakest economy and weakest social protection, mainly on Country as Angola, where the Social protection naturally not working, this evidence are strongly contributed from high levels of decreasing promoted from respective decrease of the economic growth. On the other hand, the high level of dependence markets naturally helped to create a weakest economic environment, particularly from oil and gas markets, where naturally the dependence is strongly evidenced. The most developing Countries emerged on the high level of the non economic performance growth, considering for example the high negative impacts that existed and that are particularly promoted from this evidence, naturally. Angola and Mozambique, this two different countries, was experienced this approach, considering naturally that, the growth of GDP not depend from good behaviour of domestic economy, majority evidences, show that Countries as Angola and Mozambique, are particularly strongly influenced from behaviours of the international markets, where for example the international markets, determine the success of the domestic economy. On the other hand, the impoverishing growth show that, many Countries growing fast during in short run, furthermore, the growth not was enough to contributed for development economic, naturally, this evidence can for example translate that, Country can grow up significantly, but, cannot guarantee development needed, other example are particularly relatively with the Equatorial Guinea, China is other relevant example, the growth lived from India during many decades, helped Country to change to reducing substantial level of poverty, on the other hand. These examples in particular, helped to understand that, Countries normally have high level of divergence between development and growth, this divergence was naturally experienced on Angola golden decades, promoted from oil and gas sector. Thus, developing Countries, diverging significantly with growth of GDP, that is naturally strongly different from example of Japanese economy, Japan consolidate your institutions and high level of coordination policies, that give to the Country a high level of development than, the Country that have naturally strong natural resources. |
| Date: | 2026–09–02 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:hrk24_v1 |