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on Economic Growth |
| By: | Jan David Bakker; Stephan Maurer; Jörn-Steffen Pischke; Ferdinand Rauch |
| Abstract: | We study the causal connection between trade and development using one of the earliest massive trade expansions: the first systematic crossing of open seas in the Mediterranean during the time of the Phoenicians. We construct a measure of connectedness along the shores of the sea. This connectivity varies with the shape of the coast, the location of islands, and the distance to the opposing shore. We relate connectedness to local growth, which we measure using the presence of archaeological sites in an area. We find an association between better connected locations and archaeological sites during the Iron Age, at a time when sailors began to cross open water very routinely and on a big scale. We corroborate these findings at the level of the world. |
| Keywords: | urbanization, locational fundamentals, trade |
| JEL: | F14 N7 O47 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1558&r=gro |
| By: | Sheremeta, Roman; Smith, Vernon |
| Abstract: | The Protestant Reformation is a vivid example of how religious transformation could set in motion institutional changes, leading to profound consequences for economic and political development. Although economists and other social scientists agree that there is a strong relation between the Reformation and economic growth, there is an active discussion as to what are the causal pathways connecting Protestantism to long-run economic success. We discuss the causal pathways that received substantial empirical support in academic literature. Some of them, such as “work ethic” and entrepreneurial spirit of Protestants, were originally suggested by Max Weber, while others, such as religious freedom and education, are deeply grounded in economic theory. More recently, other causal pathways have been suggested, such as social ethic, civil society, and institutional changes. We bring our view of these pathways. |
| Keywords: | Reformation, religion, economic development |
| JEL: | A13 B15 E02 Z12 |
| Date: | 2017–05–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:87220&r=gro |
| By: | Erasmo Papagni; Amedeo Lepore; Emanuele Felice; Anna Laura Baraldi; Maria Rosaria Alfano |
| Abstract: | This paper analyses the contribution of public investment to growth in southern Italy in the second half of the twentieth century (1951-1995). The period saw the only convergence in modern times of the Mezzogiorno towards the Italian average (1951-1973), followed by divergence (1974-1995). Using cointegration analysis we find a statistically significant positive effect of public investment on the growth of the Mezzogiorno in the period 1951-1995. The Bai-Perron tests suggest that economic growth followed two distinct regimes, the first regime of accelerated growth in the years 1951-1973 (average growth rate 5.3%), and the second regime of low growth in the period 1974-1995 (average growth rate 1.6%). This result is confirmed by the testing procedure of Hansen (1992) which indicates a break in the determinants of GDP per unit of labour in 1974. The estimates of the model on time series of the two periods show statistically significant parameters of public investment in the first regime, but not in the second regime, when economic growth is sustained by business investment and technical change. The paper suggests that public capital may have a significant positive role in episodes of growth accelerations if the quality of the institutional environment is high, but it can lose its effectiveness if bureaucratic corruption and rent-seeking strongly affect public policy. |
| Keywords: | Public Investment, Growth Instability, Cointegration, Structural breaks, Southern Italy. |
| JEL: | H54 O14 O18 O47 |
| Date: | 2018–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2018_10&r=gro |
| By: | Li, Shunhan; Wang, Gaowang; Wang, Jin |
| Abstract: | By introducing Romer (1990)'s endogenous technological change into the multisector growth model developed by Kongsamut, Rebelo and Xie (2001), the paper shows that human capital speeds up economic growth and structural changes in the multisector economy qualitatively and quantitatively. |
| Keywords: | Human Capital; Endogenous Growth; Structural Change |
| JEL: | O14 O41 |
| Date: | 2018–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:87582&r=gro |
| By: | Büchel, Konstantin; Kyburz, Stephan |
| Abstract: | We study the effect of railway access on population growth in 19th century Switzerland. Our analysis is based on geo-referenced railway network information and an inconsequential units IV approach. Gaining direct railway access increased annual population growth by 0.4 percentage points, while municipalities in close vicinity but no direct access (i.e. 2-10 km distance) experienced a growth slump of similar magnitude. We interpret these findings as evidence of highly localised displacement effects related to railway connections. |
| Keywords: | railway access; population growth; displacement effects |
| JEL: | N33 N73 O18 |
| Date: | 2018–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:88689&r=gro |
| By: | Asongu, Simplice A; Odhiambo, Nicholas M |
| Abstract: | We analyze the evolution of fast emerging economies of the BRICS (Brazil, Russia, India, China & South Africa) and MINT (Mexico, Indonesia, Nigeria & Turkey) countries, by assessing growth determinants throughout the conditional distributions of the growth rate and real GDP output for the period 2001-2011. An instrumenal variable (IV) quantile regression approach is complemented with Two-Stage-Least Squares and IV Least Absolute Deviations. We find that the highest rates of growth of real GDP per head, among the nine countries of this study, corresponded to China, India, Nigeria, Indonesia and Turkey, but the highest increases in real GDP per capita corresponded, in descending order, to Turkey China, Brazil, South Africa and India. This study analyzes the impacts of several indicators on the increase of the rate of growth of real GDP and on the logarithm of the real GDP. We analyze several limitations of the methodology, related with the selection of the explained and the explanatory variables, the effect of missing variables, and the particular problems of some indicators. Our results show that Net Foreign Direct Investment, Natural Resources, and Political Stability have a positive and significant impact on the rate of growth of real GDP or on real GDP |
| Keywords: | Economic Growth; Emerging countries; Quantile regression |
| Date: | 2018–04–26 |
| URL: | http://d.repec.org/n?u=RePEc:uza:wpaper:23818&r=gro |
| By: | Matías Braun; Francisco Parro; Patricio Valenzuela |
| Abstract: | This paper investigates the relationship between income inequality, financial development and economic growth from both a theoretical and an empirical perspective. This paper introduces a simple model in which the effect of inequality on growth depends on the degree of development of the domestic financial market. The model predicts that greater inequality reduces growth in economies with low levels of financial development but that this effect is attenuated in economies with more developed systems. Using a panel dataset that covers a large number of countries over the past four decades, this paper shows empirical evidence that is consistent with the main prediction of the model. The model also predicts that individuals in economies with developed financial markets have a higher tolerance to inequality; we also provide evidence for this through value surveys. Overall, this paper's major findings highlight that some of the pernicious effects of inequality can be attenuated by improving access to credit. JEL Classification: D3; E6; P1; O4; I2. Key words: Keywords: Financial development; growth; inequality; income distribution; private credit. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:edj:ceauch:329&r=gro |
| By: | Masaya Yasuoka (School of Economics, Kwansei Gakuin University) |
| Abstract: | This paper sets an endogenous fertility model with human capital accumulation and monetary policy in a closed economy, with subsequent examination of how fertility, education investment for children, and the inflation rate change. Results of theoretical analysis indicate that the child allowance raises fertility and reduces educational investment. However, the effect of the subsidy for education investment on fertility and educational investment is ambiguous because of the closed economy. Because of the change of fertility and income growth, the inflation rate can be changed by the child care policy. An increase in monetary stock policy raises human capital growth because the physical capital accumulation is facilitated. |
| Keywords: | Child care Policy, Education, Fertility, Inflation |
| JEL: | J11 J14 E31 H22 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:kgu:wpaper:182&r=gro |
| By: | Daruich, Diego (New York University); Kozlowski, Julian (Federal Reserve Bank of St. Louis) |
| Abstract: | Poor families have more children and transfer less resources to them. This suggests that family decisions about fertility and transfers increase income inequality and dampen intergenerational mobility. To evaluate the quantitative importance of this mechanism, we extend the standard heterogeneous-agent life-cycle model with earnings risk and credit constraints to allow for endogenous fertility, family transfers, and education. The model, estimated to the US in the 2000s, implies that a counterfactual at income-fertility profile would-through the equalization of initial conditions-reduce intergenerational persistence and income inequality by about 10%. The impact of a counterfactual constant transfer per child is twice as large. |
| Keywords: | Inequality; Intergenerational mobility; Quantitative model; Fertility |
| JEL: | D91 J13 J24 J62 |
| Date: | 2016–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2018-011&r=gro |
| By: | Oyvat, Cem; Öztunalı, Oğuz; Elgin, Ceyhun |
| Abstract: | This study investigates the impact of various economic factors in determining the relationship between functional income distribution and economic growth. Inspired by the seminal paper of Bhaduri and Marglin (1990), we base our analysis on a demand-driven distribution and growth model for an open economy that allows for either profit-led or wage-led growth. To this end, we use a cross-country panel dataset consisting of 41 countries from 1961 to 2011. In the first step of the empirical analysis, we first estimate whether growth regime is wage-led or profit-led in each country. Next, in the second step, using probit and meta-regression approaches with cross-country data, we analyse the effects of various macroeconomic variables on the nature of economic growth. Our results strongly reflect that a higher level of trade openness is associated with a lower probability of being wage-led. Moreover, we find evidence that lower wage inequality would make an economy more wage-led and that countries with a greater private credit-to-GDP ratio are more likely to be profit-led. |
| Keywords: | Distribution; demand; economic growth; trade openness; Keynesian economics; |
| JEL: | E12 E25 E61 O47 |
| Date: | 2018–07–12 |
| URL: | http://d.repec.org/n?u=RePEc:gpe:wpaper:20951&r=gro |
| By: | Tetsuo Ono (Graduate School of Economics, Osaka University); Yuki Uchida (Faculty of Economics, Seikei University) |
| Abstract: | This study presents an overlapping-generations model with physical and human capital accumulation and considers probabilistic voting over capital and labor taxes and public debt to finance public education expenditure. Our analysis shows that the greater political power of the old induces the government to raise the labor tax on the young and lower the capital tax on the old as well as issue debt. The analysis also shows that the introduction of a debt ceiling rule calls for a rise in the labor tax and thus lowers the welfare of the currently working generation. However, it increases the growth rate, and this growth effect raises the welfare of future generations. These benefits last for a long period even if the rule is imposed only for a limited time. |
| Keywords: | Capital taxation, Public debt, Economic growth, Probabilistic vot- ing, Overlapping-generations model |
| JEL: | D70 E24 H63 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1822&r=gro |
| By: | Malefane, Malefa R; Odhiambo, Nicholas M |
| Abstract: | This paper examines the dynamic impact of trade openness on economic growth in Lesothousing the autoregressive distributed lag (ARDL) bound testing approach. The study employsfour indicators of trade openness, which include three trade-based proxies and an index oftrade openness. The empirical results of this study show that when the ratio of exports andimports to GDP is employed, then trade openness has a significant negative impact oneconomic growth in both the short run and the long run. When the ratio of export to GDP isused as a proxy for trade openness, the results show that trade openness only has a negativeshort-run impact on economic growth. The results also reveal that when the ratio of imports toGDP is used in the analysis, trade openness has a significant negative impact on economicgrowth in the long run, but not in the short run. Moreover, the results indicate that tradeopenness index has no significant impact on economic growth in Lesotho. These empiricalresults have important policy implications for Lesotho. Among other things, the policy makersshould revisit their trade policies and implement policies that will enable the country???seconomic growth to benefit from trade openness that emanates from the imports. The policymakers should also pursue policies that enable the expansion in both international trade andeconomic growth, such that beneficial growth effects can be realized from trade with noexclusions. |
| Keywords: | Trade Openness, Economic Growth; ARDL; Exports; Imports; Lesotho |
| Date: | 2018–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:uza:wpaper:23787&r=gro |