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on Economic Growth |
| By: | Darrell J. Glaser (United States Naval Academy); Ahmed S. Rahman (United States Naval Academy) |
| Abstract: | This paper examines the effects of engineer-oriented and technical experience on job mobility during an era of rapid technological advance. We first develop an on-the-job search model to help us understand factors leading to job switching under rigid payment systems. Then, using longitudinal data on late 19th-Century British and American naval officer- and engineer-careers, we show how different forms of technical experience and pro- motion rates infl uence job switching. Using our estimates we find rates of return to technical experience rising dramatically by the turn of the 20th Century. To our knowledge these are the earliest estimates of returns to any type of technical skill. These findings help us understand how modernizing organizations can become more vulnerable to loss of skilled personnel, and how organizations might optimally respond to such loss. |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:usn:usnawp:60&r=gro |
| By: | Jun, Bogang (Massachusetts Institute of Technology, The MIT Media Lab); Kaltenberg, Mary (UNU-MERIT, Maastricht University, and Massachusetts Institute of Technology, The MIT Media Lab); Hwang, Won-sik (Korea Institute for Industrial Economics and Trade) |
| Abstract: | This paper aims to show that the level of inequality increases via the human capital channel with credit market imperfections generating negative effects on economic growth. We expand the model presented by Galor and Zeira (1993) to represent the fact that the economy benefits from endogenous technological progress and that the government provides financial aid to reduce the financial hurdles for human capital accumulation. We use Korean data from 1998 to 2008 to empirically confirm that education plays a significant role in the divergence of household wealth over time and that the government's financial aid package in the form of the new student loans programme positively influences equality and short-run economic growth by promoting the number of skilled workers. |
| Keywords: | Human Capital, Economic Growth, Inequality, South Korea |
| JEL: | I24 I25 O15 |
| Date: | 2017–08–11 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2017034&r=gro |
| By: | Paul, Pascal (Federal Reserve Bank of San Francisco) |
| Abstract: | Leading up to the Great Recession, the U.S. economy experienced a massive expansion of credit, a slowdown in productivity growth, and a rapid increase in income inequality. All of these developments may have contributed to an unusual buildup of financial instability. This paper explores the contribution of each of these three developments in explaining financial crises using long-run historical data for 17 advanced economies. Previous research showed that credit growth is a robust predictor of financial fragility. I find that changes in top income shares and productivity growth are strong early warning indicators as well. In fact, changes in top income shares outperform credit as crises predictors. Moreover, financial recessions that are preceded by strong increases in income inequality or low productivity growth are also associated with deeper and slower recoveries. Overall, the results indicate that both the productive capacity of an economy and the distribution of income matter for financial stability. |
| JEL: | E24 E44 E51 G01 G20 H12 N10 N20 |
| Date: | 2017–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2017-23&r=gro |
| By: | Bakker, Gerben (London School of Economics); Crafts, Nicholas (University of Warwick); Woltjer, Pieter (University of Groningen) |
| Abstract: | We develop new aggregate and sectoral Total Factor Productivity (TFP) estimates for the United States between 1899 and 1941 through better coverage of sectors and better-measured labor quality, and find TFP-growth was lower than previously thought, broadly based across sectors, and strongly variant intertemporally. We then test and reject three prominent claims. First, the 1930s did not have the highest TFP-growth of the twentieth century. Second, TFP-growth was not predominantly caused by four ‘great inventions’. Third, TFP-growth was not driven indirectly by spillovers from great inventions such as electricity. Instead, the creative-destruction-friendly American innovation system was the main productivity driver. |
| Keywords: | productivity growth; total factor productivity; great inventions; spillovers; United States — history JEL Classification: N11, N12, O47, O51. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:341&r=gro |
| By: | Michael Alexeev (Indiana University); Yao-Yu Chih (Texas State University) |
| Abstract: | We apply both conventional and spatial techniques to panel data for US states to examine the effects of plausibly exogenous oil price shocks on economic growth. Contrary to the oil curse claims, we find that oil price shocks have numerically moderate but highly statistically significant positive direct effects on growth while the indirect effects are insignificant. We also find that positive impact of oil occurs only in states with a high value of the economic freedom index. In a technical contribution to the spatial econometrics literature we propose a procedure for estimating marginal effects of oil price shocks in a model with interaction terms. In addition, we show that the cumulative direct oil price effects on economic growth are persistent over time. |
| Keywords: | oil curse, regional economic growth, spatial lags |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:inu:caeprp:2017011&r=gro |
| By: | Matthias Schön (Deutsche Bundesbank); Dirk Krueger (University of Pennsylvania); Alexander Ludwig (Research Center SAFE, Goethe University); Jesus Fernandez-Villaverde (University of Pennsylvania) |
| Abstract: | We develop an overlapping generations model with endogenous growth and a health sector, in order to explain three secular facts characteriz- ing the U.S. economy: a substantial increase in life expectancy, a rise in the share of GDP devoted to health-related expenditures as well as an increase in the relative price of medical goods. We show how to inter- pret these observations as the equilibrium outcome of a model in which technological progress through quality improvements is endogenously directed to the sector producing medical goods. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed017:767&r=gro |
| By: | Edle von Gaessler, Anne; Ziesemer, Thomas (UNU-MERIT, and SBE Maastricht University) |
| Abstract: | We modify a Lucas-type endogenous growth model to contain endogenous labour supply, imperfect international capital movements, and estimated interest and education time functions. Solutions based on realistic calibrations show that (i) the rate of human capital depreciation through ageing has a much stronger negative impact on growth than further changes in the population growth rate or the Frisch elasticity of labour supply; (ii) a higher rate of human capital depreciation, a higher growth rate of the dependency ratio, and lower past cumulated savings all go together with a higher second-best education time and higher growth; (iii) demographic dividends are positive in the short run but negative in the long run. |
| Keywords: | Ageing, human capital, endogenous growth, open economy, serendipity theorem |
| JEL: | F43 J11 O11 O33 O41 |
| Date: | 2017–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2017043&r=gro |
| By: | Ziesemer, Thomas (UNU-MERIT, and SBE, Maastricht University,) |
| Abstract: | Endogenous growth theory has produced formulas for steady-state growth rates of income per capita which are linear in the growth rate of the population. Depending on the details of the models, slopes and intercepts are positive, zero or negative. Empirical tests have taken over the assumption of exogenous population growth from the theoretical models and have mostly not distinguished steady-state results from transitional growth. In contrast, we assume (i) that there is two-way causality and (ii) capture the steady-state property by a long-term relation in a series of vector-error-correction models allowing (iii) successively for more heterogeneity. The slope of the growth equations is positive in this setting. Intercepts are most frequently also positive, but almost equally often zero, and sometimes even negative. Although results slightly favour fully- over semi-endogenous growth, and the slightly more frequent case is that long-run growth can remain positive if population stops growing, zero or negative intercepts cannot be ruled out. |
| Keywords: | Endogenous growth, population growth, panel times series estimation |
| JEL: | C33 O47 |
| Date: | 2017–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2017036&r=gro |
| By: | Mathieu Grobéty |
| Abstract: | How does government debt affect long-run economic growth? A prominent strand of theoretical literature suggests that government debt has a negative effect on growth. Another strand argues that government debt can foster growth by enhancing the supply of liquid assets or collateral. We empirically investigate the liquidity channel of government debt and apply the difference-in-differences methodology of Rajan and Zingales (1998) on a sample of 28 manufacturing industries across 39 developing and developed countries. We provide evidence that industries with greater liquidity needs tend to grow disproportionately faster in countries with higher levels of government debt. The positive liquidity effect of government debt on industry growth stems from domestic debt, not external debt. We perform a battery of robustness checks and show that our results are robust to using instrumental variables and controlling for many competing channels. |
| Keywords: | Government Debt, Growth, Liquidity, Non-linearity |
| JEL: | H63 D92 O16 G21 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:snb:snbwpa:2017-13&r=gro |
| By: | Freire Junior, Clovis (United Nations, Division for Sustainable Development, Department of Economic and Social Affairs, and UNU-MERIT, Maastricht University) |
| Abstract: | Economic diversification is very relevant for poorer developing countries to create jobs and foster economic development. That need has been recognised in key internationally agreed development goals. The empirical economic literature has identified several stylised facts about the pattern of diversification of economies, but the development of explanations for those patterns in general has been only loosely associated with economic theory on growth, trade, technology change and structural transformation. Making that connection is relevant because it could inform policymakers in developing countries in designing and implementing policies for promoting diversification. This paper presents a model of structural economic dynamics and endogenous technological change that is able to replicate empirical regularities related to economic diversification. The model is used to study strategies to foster diversification in poorer countries, which could help to better target action in the implementation of internationally agreed goals related to the economic diversification of these countries. |
| Keywords: | Diversification, Economic Complexity, Structural Transformation, Productive Capacities, Economic Development |
| JEL: | C61 C63 E12 O11 O30 O41 |
| Date: | 2017–08–10 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2017033&r=gro |