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on Economic Growth |
| By: | Ken-Ichi Akao; Stefano Bartolini |
| Abstract: | Over the past half century in the US, substantial economic growth coexisted with increasing inequality, and the erosion of social capital and well-being. Currently, no comprehensive explanations is available for such paradoxical mix of brilliant eco- nomic performance and social crises. We present a simple endogenous growth model showing that economic growth, the decline of social capital and well-being, and rising well-being inequality can be interconnected, mutually reinforcing phenomena. This type of growth can be described as defensive because it arises from the expendi- tures of households aimed at defending themselves against growth-related negative externalities, thus fostering economic growth. Defensive growth leads to a loss of well-being in the long run because, beyond a certain level of output, private pros- perity is no longer able to compensate for social poverty. Along a defensive growth path, the decline of social capital disproportionately weighs on the well-being of low- income households, because of their relatively lower capacity to finance defensive spending. This prediction is consistent with the evidence showing that over the past 50 years the loser of the "pursuit of happiness" stated in the American Constitution is the working class. |
| Keywords: | Defensive growth, social capital, relative consumption Jel Classification: O41, I31, D31, Z13 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:usi:wpaper:941 |
| By: | Nobuyasu Suzusho (Graduate School of Economics, Kyoto University) |
| Abstract: | This paper focuses on the role of strategic complementarity between artificial intelligence (AI) investment and human capital accumulation, analyzing how they interact to shape long-term economic growth. Our model introduces an explicit threshold investment level necessary for viable AI adoption and demonstrates how its existence, along with agents' expectations, generates multiple equilibria. The paper concludes with policy recommendations to lower AI adoption barriers, bolster human capital, and align public and private expectations to foster a sustained, AI-driven growth trajectory. |
| Keywords: | Artificial Intelligence (AI), Economic Growth, Human Capital, Threshold Investment, Multiple Equilibria, Strategic Complementarity |
| JEL: | O33 O40 O41 J24 |
| URL: | https://d.repec.org/n?u=RePEc:kyo:wpaper:1125 |
| By: | Quang-Thanh Tran |
| Abstract: | This paper examines the long-term consequences of population decline in an endogenous growth framework with stochastic labor-augmenting technological progress. The key factor in fertility decisions is the cost of child-rearing, which is modeled as a convexfunction of labor productivity. As technology grows, the costs of raising children (including childbearing, childcare, and educational investments) increase disproportionately. While the economy may experience rapidgrowth in the early stagesof de velopment, it is likely to face sharp contractions in both population and innovation as child-rearing costs outpace the incentives for having children. We show that consistent population decay is almostinevitable. Nevertheless, a pronatalist policy can increase the likelihood of achieving high long-run labor productivity and living standards for future generations, although some short-run welfare deficits are to be expected. |
| URL: | https://d.repec.org/n?u=RePEc:toh:tupdaa:81 |
| By: | Mingyan CHEN; Shinichi NISHIYAMA |
| Abstract: | This study extends the Barro–Becker–Bewley model of endogenous fertility and intergen-erational transfers by incorporating human capital investment in children and life-cycle savings. Calibrating the model to the U.S. economy, this study quantitatively analyzes the potential effects of child-related policies such as child allowances and education subsidies. Child allowances raise fertility in the short run but reduce investment in human and phys-ical capital, thereby suppressing economic growth. Education subsidies reduce fertility in the short run but enhance welfare across all generations. The effects of child-related poli-cies on income and wealth inequality and intergenerational income mobility are generally limited. |
| Keywords: | dynamic general equilibrium; heterogeneous agents; overlapping generations. |
| JEL: | C61 D15 H31 I24 J13 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:kue:epaper:e-25-014 |
| By: | Can Sever |
| Abstract: | Cadasters—records of land and property ownership—constitute an important pillar of a country’s institutional landscape by enabling the assignment of property rights. This paper examines the impact of cadasters on long-term economic growth by identifying a specific channel in this link: asset tangibility. It hypothesizes that the more a firm’s assets are tangible, the more relevant cadasters become. The analysis uses a cross-country dataset on cadasters together with granular data from industry panels over the last six decades. The results show that the development of cadasters fosters long-term growth, particularly in industries with high asset tangibility. Higher investment in those industries, resulting from stronger cadasters, contributes to this pattern. The growth impact of cadasters is more pronounced in (i) countries that lack strong cadasters, such as in Sub-Saharan Africa; and (ii) countries with typically more investment-conducive legal systems. The findings suggest that cadastral reforms can help stimulate investment and sustain long-term growth in many developing economies. |
| Keywords: | Economic growth and development; institutions; cadasters |
| Date: | 2026–02–27 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/034 |
| By: | Paula E Gobbi (ULB - Université libre de Bruxelles = Free University of Brussels); Anne Hannusch (Universität Bonn = University of Bonn); Pauline Rossi (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - Groupe ENSAE-ENSAI - Groupe des Écoles Nationales d'Économie et Statistique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - Groupe ENSAE-ENSAI - Groupe des Écoles Nationales d'Économie et Statistique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique, X - École polytechnique - IP Paris - Institut Polytechnique de Paris, IP Paris - Institut Polytechnique de Paris) |
| Abstract: | Much of the observed cross-country variation in fertility aligns with the predictions of classic theories of the fertility transition: countries with higher levels of human capital, higher GDP per capita, or lower mortality rates tend to exhibit lower fertility. However, when examining changes within countries over the past 60 years, larger fertility declines are only weakly associated with greater improvements in human capital, per capita GDP, or survival rates. To understand why, we focus on the role of family institutions, particularly marriage and inheritance customs. We argue that, together with the diffusion of cultural norms, they help explain variations in the timing, speed and magnitude of the fertility decline. We propose a stylized model integrating economic, health, institutional and cultural factors to study how these factors interact to shape fertility transition paths. We find that family institutions can mediate the effect of economic development by constraining fertility responses. |
| Date: | 2026–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05496893 |
| By: | John Van Reenen |
| Abstract: | How the study of innovation and competition has been transformed. |
| Keywords: | Growth, Creative destruction, Nobel, Innovation, , Productivity |
| Date: | 2026–02–20 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepcnp:722 |
| By: | Ohler, Johann |
| Abstract: | Evolutionary growth theory (i.e., Galor and Moav (2002) and Clark (2007)) posits that natural selection set the stage for modern growth. I leverage micro-data from historical Germany to assess the viability of the selection mechanisms. I estimate fertility differentials and the inter-generational transmission of SES. High status couples, proxied by occupation, had 1-2 additional children, and SES was strongly heritable. To explore whether these parameters induce selection, I simulate an overlapping generation model of fertility choice and status transmission. The German parameters do not enable Clark’s survival of the richest, whereas Galor and Moav’s selection on quality can arise if the returns to investing in child quality are sufficiently large. Monte Carlo simulations extend the analysis beyond Germany. Survival of the richest requires exceptionally high coefficients of transmission (≈0.87), and selection on quality emerges whenever returns to quality investments translate into higher fertility. Both depend on the strong heritability of the growth-complementary traits. |
| Keywords: | socioeconomic status; fertility; inter-generational mobility; endogenous growth theory; survival of the riches; historical demography |
| JEL: | O40 J12 J13 J62 N33 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:wpaper:137404 |
| By: | Becker, Sascha O (University of Warwick and Monash University) |
| Abstract: | This chapter explores the intersection of religion and economics on the 250th anniversary of Adam Smith's The Wealth of Nations, first published in 1776. While Smith is often viewed as a secular figure in economics, his work was deeply influenced by the moral philosophy of his time, which was shaped by Christian thought. I discuss how economists think about the religious themes in Smith's work in the 21st century and review what we know today about the connection between religion and economic outcomes. |
| Keywords: | Adam Smith; religion JEL Classification: B1, B2, N3, N9, P5, Z12 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:789 |