nep-gro New Economics Papers
on Economic Growth
Issue of 2025–04–21
twelve papers chosen by
Marc Klemp, University of Copenhagen


  1. How Did Japan Catch-up with the West? Some Implications of Recent Revisions to Japan’s Historical Growth Record By BROADBERRY, Stephen; FUKAO, Kyoji; SETTSU, Tokihiko
  2. When did Argentina lose its mojo? A short note on economic divergence By Eduardo Levy Yeyati; Sebastián Katz
  3. Technology Shocks, Directed Technical Progress and Climate Change By Grimaud, André; Rougé, Luc
  4. International Knowledge Diffusion and Productivity Growth in a Cash-in-Advance Economy By Colin Davis; Ken-ichi Hashimoto
  5. Colonial Persistence By Fenske, James; Gupta, Bishnupriya; Mukhopadhyay, Anwesh
  6. Good Neighbours By Mandakini Kaul; Nikita Singla
  7. Connecting to Electricity: Technical Change and Regional Development By Atsuki Kotani
  8. Napoleonic Administrative Reforms and Development in the Italian Mezzogiorno By Giulio Cainelli; Carlo Ciccarelli; Roberto Ganau
  9. A “Marginal” Tale of Two Germanies: Accounting for the Systemic Divide By Daniel Fehrle; Vasilij Konysev
  10. Regional Variation and the Asian Little Divergence By BROADBERRY, Stephen; FUKAO, Kyoji; GUAN, Hanhui
  11. Value, Values, and the Role of Awareness By Sandra Eickmeier
  12. Forecasting technological progress By Lafond, François

  1. By: BROADBERRY, Stephen; FUKAO, Kyoji; SETTSU, Tokihiko
    Abstract: This paper uses recently revised data on Japanese GDP to analyze the process by which Japan caught-up with the West. The new historical national accounts suggest that Japan was more than one-third richer in 1874 than suggested by Maddison, and that the Meiji period growth built on earlier development. We show that (1) despite trend GDP per capita growth during the Tokugawa shogunate, the catching-up process only started after 1890 with respect to Britain, and after World War 1 with respect to the United States and many European nations (2) although catching up was driven by the dynamic productivity performance of Japanese manufacturing, Japanese success in exporting manufactured goods was just as much driven by limiting the growth of real wages (3) despite claims that Japan was following a distinctive Asian path of labour-intensive industrialisation, capital played an important role in the catching-up process.
    Keywords: Labour productivity, sectoral disaggregation, international comparison
    JEL: N10 N30 O47 O57
    Date: 2025–04
    URL: https://d.repec.org/n?u=RePEc:hit:hituec:763
  2. By: Eduardo Levy Yeyati; Sebastián Katz
    Abstract: Based on long series of per capita GDPs, we characterize the economic divergence of Argentina in the 20th century relative to a group of countries with comparable initial income per capita. We find the divergence to be considerably longer than usually conjectured, with two marked tranches in the first half of the century and in the post war period, the latter being associated with GDP underperformance despite the relative decline in population. We identify specific dates for the inflection points, discuss the context in each case, and propose a potential explanation of the divergence together with a description of the highly volatile plateau displayed since the 1990s.
    Date: 2024–04
    URL: https://d.repec.org/n?u=RePEc:udt:wpgobi:202404
  3. By: Grimaud, André; Rougé, Luc
    Abstract: Technical progress is considered a key element in the ght against climate change. It may take the form of technological breakthroughs, that is, shocks that induce signicant leaps in the stock of knowledge. We use an endogenous growth framework with directed technical change to analyze the climate impact of such shocks. Two production subsectors coexist: one subsector is fossil-based, using a non-renewable resource, and yields carbon emissions; the other subsector uses a clean, renewable resource. At a given date, the economy benets from an exogenous technology shock. We fully characterize the general equilibrium and analyze how the shock modies the economys trajectory. The overall e¤ect on carbon emissions basically depends on the substitutability between the production subsectors, the initial state of the economy, and the nature and size of the shock. We notably show that green technology shocks induce higher short-term carbon emissions when the two subsectors are gross complements, but also in numerous cases when they are gross substitutes.
    Keywords: directed technical change; endogenous growth; technology shocks; climate; change
    JEL: O33 O44 Q32 Q54 Q55
    Date: 2025–04–04
    URL: https://d.repec.org/n?u=RePEc:tse:wpaper:130495
  4. By: Colin Davis; Ken-ichi Hashimoto
    Abstract: This paper investigates how the cash-in-advance (CIA) constraints that firms face in production and innovation decisions affect the long-run relationship between monetary policy and innovation-based economic growth. Firms produce differentiated product varieties and invest in process innovation to reduce production costs. With imperfect knowledge diffusion across countries, the country with the greater share of industry has relatively productive firms. We find that when innovation has a stricter CIA requirement than production, an increase in the nominal interest rate in the country with the larger (smaller) share of industry reduces the industrial share of that country, thereby decreasing (increasing) the rate of productivity growth. We also examine the implications of improvements in knowledge diffusion for the optimal nominal interest rate policy of each country.
    Date: 2025–03
    URL: https://d.repec.org/n?u=RePEc:dpr:wpaper:1278
  5. By: Fenske, James (University of Warwick); Gupta, Bishnupriya (University of Warwick); Mukhopadhyay, Anwesh (University of Warwick)
    Abstract: We review the present-day impacts of colonial rule on former colonies. Persistence exists because of multiple equilibria, path dependence, institutions, culture, knowledge, and technology. Empirical work in this literature primarily uses tools from applied econometrics, though best practices are needed to overcome the limitations of these tools. Colonial interventions relating to institutions, infrastructure, land, forced labour, the slave trade, and human capital all have measurable impacts in the present. And yet many colonial interventions have failed to persist or have led to reversals. These cases are informative about why colonial rule still matters, as are cases where precolonial influences have had persistent impacts despite, or even because of, colonial rule.
    Date: 2025
    URL: https://d.repec.org/n?u=RePEc:wrk:warwec:1557
  6. By: Mandakini Kaul; Nikita Singla
    Keywords: Macroeconomics and Economic Growth-Economic Development Macroeconomics and Economic Growth-Economic Growth
    Date: 2023–06
    URL: https://d.repec.org/n?u=RePEc:wbk:wboper:39902
  7. By: Atsuki Kotani
    Abstract: The technical change from steam engines to electric motors dramatically transformed manufacturing activities during the Second Industrial Revolution. This paper explores how this technical change progressed and what consequences it brought for the evolution of economic geography. I hypothesize that electric motors powered by purchased electricity lowered barriers to entry in the manufacturing sector due to their significantly lower fixed costs compared to steam engines. To examine this hypothesis, I exploit the historical expansion of electricity grids in early 20th-century Japan and newly digitized establishment-level official records, including information on power sources of establishments. Descriptive evidence shows that electric motors were widely adopted by establishments of all sizes, whereas steam engines were primarily adopted by large establishments, indicating lower fixed costs of electric motors. Using hydropower potential as an instrument, I document that new entrants played a crucial role in driving this technical change and stimulating manufacturing activities. Overall, these findings lend substantial support for the hypothesis. Furthermore, I find that regions with earlier electricity access experienced substantial population growth throughout the early 20th century and exhibit larger economic activity even in the 21st century. These findings suggest a persistent impact of this technological shock: the rapid increase in entrant activities generated agglomeration forces in manufacturing, with accumulated effects still visible in the spatial distribution of economic activity today.
    Date: 2025–03
    URL: https://d.repec.org/n?u=RePEc:dpr:wpaper:1279
  8. By: Giulio Cainelli (Department of Economics and Management "Marco Fanno", University of Padua); Carlo Ciccarelli (Department of Economics and Finance, University of Rome Tor Vergata, and CAGE Research Centre, Department of Economics, University of Warwick); Roberto Ganau (Department of Economics and Management "Marco Fanno", University of Padua, and Department of Geography and Environment, LSE)
    Abstract: We study how changes in the administrative hierarchy of a country affect development at the city level. We use the 1806 Napoleonic administrative reform implemented in the Kingdom of Naples as a historical experiment to assess whether district capitals with supra-municipal administrative functions enjoyed an urban development premium compared with non-capital cities. We find that district capitals recorded a population growth premium throughout the 19th century (1828–1911) and experienced higher industrialization than non-capital cities, both before and after the Italian unification. We explain our findings through mechanisms relating to public goods provision and transport network accessibility.
    Keywords: Napoleonic reforms; local administrative hierarchy; development
    JEL: H11 N13 O11 R11
    Date: 2025–04
    URL: https://d.repec.org/n?u=RePEc:bdi:workqs:qse_54
  9. By: Daniel Fehrle (Kiel University, Department of Economics); Vasilij Konysev (University of Augsburg, Department of Economics)
    Abstract: The comparative economic performance between the former socialist German Democratic Republic (GDR) and the capitalist Federal Republic of Germany (FRG) remains inconclusive due to valuation problems. We address these problems by applying wedge-growth accounting to a newly compiled dataset. More precisely, we compare the allocation efficiency using wedges between marginal utility and productivity, as well as Total Factor Productivity (TFP) growth. Wedges in marginal utility account for binding quantity constraints in GDR’s goods and FRG’s labor market. We analyze the resulting unitless wedges and swap them in an equivalent growth model for the two Germanies to quantify their impact on output and economic welfare. The analysis reveals that the consequences of GDR’s rationing were multiple times more drastic than FRG’s unemployment. An observed faster output growth in the GDR stems from excessive labor input—depressing consumption-based welfare by a fourth—rather than from physical capital or TFP. Instead, GDR’s economic activity fell comparatively ten years further behind due to lower TFP growth. Lastly, persistent, substantial net inflows increase GDR’s welfare by 25 %.
    Keywords: Wedge-growth accounting, central planner allocation, quantity constraints
    JEL: E13 N14 O11 O47 P51
    Date: 2025–04
    URL: https://d.repec.org/n?u=RePEc:aug:augsbe:347
  10. By: BROADBERRY, Stephen; FUKAO, Kyoji; GUAN, Hanhui
    Abstract: Comparing the major Asian economies of China, India and Japan without taking account of variations in size suggests that the Asian Little Divergence began in the eighteenth century when Japan overtook first India and then China. However, the Great Divergence debate has focused on when the leading regions of the declining countries first fell behind and there was significant regional variation in GDP per capita in all three countries. Allowing for regional variation significantly changes the dating of the Asian Little Divergence: (1) In China, the Yangzi Delta, with a population about the same size as the whole of Japan, did not fall behind until around the time of the Meiji restoration in 1868. (2) In Japan, the Kinai region forged ahead of the Yangzi Delta around 1800. (3) In India, Mysore remained behind the Yangzi Delta throughout the period 1600-1870 and therefore has less significance for the timing of the Asian Little Divergence.
    Keywords: Regions, GDP per capita, Asia, Little Divergence
    JEL: N15 N95 O47
    Date: 2025–04
    URL: https://d.repec.org/n?u=RePEc:hit:hituec:764
  11. By: Sandra Eickmeier
    Abstract: Economists recently have pointed to a critical disconnect between economic value and ethical values as a key societal issue. Using a survey of 2, 000 German households this paper reveals a misalignment between earnings and the values attributed to professions. Households prioritize professions addressing basic needs and benefiting society and nature over those offering personal utility, high remuneration, or economic growth, highlighting the importance of ethical considerations. This paper argues that values require a solid foundation rather than mere discussion or imposition. Linking values (and value) to awareness, it shows that more aware (along with more educated and informed) households favor professions supporting ethical values such as societal and environmental contributions, creativity, and beauty. Lastly, 60% of households support shifting societal values toward shared responsibility, though responses vary across households.
    Keywords: economic value, ethical values, earnings, prices, mindset, awareness, consciousness, surveys, direction of growth, quality of growth
    JEL: D9 E3 E7 I3 J3 Z1
    Date: 2025–03
    URL: https://d.repec.org/n?u=RePEc:een:camaaa:2025-14
  12. By: Lafond, François
    Abstract: After a brief history of technological forecasting, I synthesize our work at the Institute for New Economic Thinking over the last decade developing time series models for performance curves. I conclude with ongoing efforts and a research agenda.
    Keywords: Performance curves, Experience curves, Diffusion curves, Patent networks
    Date: 2025–03
    URL: https://d.repec.org/n?u=RePEc:amz:wpaper:2025-10

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