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on Economic Growth |
| By: | Paul Bouscasse; Emi Nakamura; Jón Steinsson |
| Abstract: | We provide new estimates of the evolution of productivity in England from 1250 to 1870. Real wages over this period were heavily influenced by plague-induced swings in the population. We develop and implement a new methodology for estimating productivity that accounts for these Malthusian dynamics. In the early part of our sample, we find that productivity growth was zero. Productivity growth began in 1600—almost a century before the Glorious Revolution. Post-1600 productivity growth had two phases: an initial phase of modest growth of 4% per decade between 1600 and 1810, followed by a rapid acceleration at the time of the Industrial Revolution to 18% per decade. Our evidence helps distinguish between theories of why growth began. In particular, our findings support the idea that broad-based economic change preceded the bourgeois institutional reforms of 17th century England and may have contributed to causing them. We also estimate the strength of Malthusian population forces on real wages. We find that these forces were sufficiently weak to be easily overwhelmed by post-1800 productivity growth. |
| JEL: | N13 O11 O47 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28623&r=all |
| By: | Farid Gasmi (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Laura Recuero Virto (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique); Denis Couvet (MNHN - Muséum national d'Histoire naturelle) |
| Abstract: | In a dataset on 83 countries covering the years 1960–2009, we find a negative indirect effect of the share of renewable natural capital in wealth on economic growth transmitted through demographic factors, more specifically, population fertility. In contrast, in countries with lower income inequality and higher institutional quality, the share of non-renewable natural capital in wealth has a direct positive impact on growth. We also find that countries with higher income per capita, human development, and institutional quality have a higher share of renewable natural capital per capita, but a lower share of renewable natural capital in wealth. Renewable natural capital is thus valuable for the population and of primary concern for empowered countries, even though it contributes less to wealth and economic growth. Our results raise serious questions about the way wealth and growth are defined in economics when one investigates the impact of natural capital and point to the importance of preserving natural capital, particularly, in less developed countries. |
| Keywords: | Non-renewable,Renewable,Natural capital,Economic growth |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03164952&r=all |
| By: | Runganga, Raynold; Mhaka, Simbarashe |
| Abstract: | African countries are expected to be having a comparative advantage when it comes to agricultural products. If this is true, specializing in agriculture can increase output levels. However, the effect of agriculture on growth has yielded various research interests and the results differ from country to country. In this paper, we try to ascertain the impact of agriculture on economic growth in Zimbabwe using the Autoregressive Distributed Lag (ARDL) estimation technique, employing data from 1970 to 2018. In both the short run and long run, the study found that inflation, government expenditure, and gross fixed capital formation have a positive impact on economic growth. The study also found that agricultural production has a positive impact on economic growth in the short run, and no impact on economic growth was found in the long run. Thus, the agricultural sector plays an important role in the early stages of economic development, and when the economy has developed, agriculture plays a minimal role. It is evident from the results of this paper that agriculture is an engine for growth in the short run and should eventually be supported by other macroeconomic policies to promote economic growth in the long run. |
| Keywords: | Agricultural Production, Economic Growth, ARDL. |
| JEL: | C13 F43 O4 Q1 |
| Date: | 2021–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:106988&r=all |
| By: | Mariani, Fabio (Université catholique de Louvain); Mercier, Marion (Université Paris-Dauphine); Pensieroso, Luca (IRES, Université catholique de Louvain) |
| Abstract: | This paper studies the interplay between left-handedness and economic development. To explain the decline and subsequent recovery of left-handedness observed over the last few centuries in the Western world, we propose a theory in which economic development influences the prevalence of left-handedness through structural change and a genetic mechanism driven by differential fertility. We further explore the possibility that the prevalence of left-handedness influences growth, finding that the link between handedness and economic performance varies across stages of development. Consistent with the implications of our model, the analysis of US data suggests that left-handedness can positively contribute to growth, once the economy has reached a sufficiently high level of human capital. Our research provides an example of how economic development can shape evolutionary forces, thus improving our understanding of the growth-diversity link. |
| Keywords: | handedness, economic growth, evolution, diversity, unified growth theory |
| JEL: | O11 O14 O33 O40 J13 J24 Q57 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14237&r=all |
| By: | Zheng, Zhijie; Hu, Ruiyang; Yang, Yibai |
| Abstract: | This study explores the effects of monetary policy in a Schumpeterian growth model with endogenous quality increment and distinct cash-in-advance (CIA) constraints on consumption, manufacturing and R&D investment. Our results are summarized as follows. When the CIA constraint is solely on consumption expenditure, an increase in the nominal interest rate may stifle economic growth by lowering the arrival rate of innovation and stimulate it at the same time by raising the size of quality increment. An additional CIA constraint on manufacturing weakens the growth-retarding effect and enhances the growth-promoting effect, whereas an additional CIA constraint on R&D investment strengthens only the negative growth effect. The quantitative analysis finds that the relationship between inflation and growth can be either monotonically decreasing or hump-shaped, but the welfare effect of inflation is always negative. |
| Keywords: | Monetary Policy, Economic Growth, R&D, Endogenous Quality Increment |
| JEL: | E41 O30 O40 |
| Date: | 2021–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:106989&r=all |
| By: | Tavassoli, Sam (RMIT University); Obchonka, Martin (Australian Center for Entrepreneurship Research); Audretsch, David B. (Indiana University) |
| Abstract: | Impactful, growth-oriented entrepreneurship is a major research and policy focus. Building on arguments put forward by Jane Jacobs more than 50 years ago, we propose that local knowledge spillovers in a city are enhanced by human agency in that city (e.g. local psychological openness). This effect is critically amplified by the catalyst function of a favorable structural city environment that not only connects these agentic people (via urban density), but also facilitates the production and flow of new knowledge for these connected agentic people (via a diverse industry mix). This three-way interaction effect was confirmed in our empirical investigation of quality entrepreneurship across the MSAs (cities) in the US, using a large-scale dataset of the psychological profiles of millions of people. Local openness shows a robust positive effect on the level of quality entrepreneurship. This effect is further strengthened by a favorable structural city environment (i.e. high density and diversity) by up to 35%. Reviving Jacobs’ people focus, the results indicate that the best performing cities in terms of knowledge spillovers and economic performance are those that are not only home to, and attract, agentic people, but also empower these people by means of a physical and industrial city landscape that enables them to act in more innovative and entrepreneurial ways, as envisioned by Jacobs. We discuss the policy implications of our findings and an agenda for future research. |
| Keywords: | Entrepreneurship; Cities; Jacobs externalities; Knowledge Spillovers; Diversity; Density; Personality traits; Openness; Geographical psychology |
| JEL: | D83 D91 L26 O18 |
| Date: | 2021–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2021_002&r=all |
| By: | Antonin Bergeaud (Banque de France - Banque de France - Banque de France); Gilbert Cette (Banque de France - Banque de France - Banque de France, AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université); Rémy Lecat (Banque de France - Banque de France - Banque de France) |
| Abstract: | This study compares GDP per capita levels and growth rates across 17 advanced economies over the period 1890–2013 using an accounting breakdown and runs Phillips and Sul (Econometrica 75(6):1771–1855, 2007) convergence tests. An overall convergence process has been at work among advanced economies, mainly after WWII, driven mostly by capital intensity and then TFP, while trends in hours worked and employment rates are disparate. However, this convergence process came to a halt during technology shocks, during the two world wars and since the 1990s, with the convergence of advanced economies stopping far from the level of US GDP per capita. |
| Keywords: | GDP per capita,Productivity,Convergence,Technological change,Global history |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03032059&r=all |
| By: | Jerg Gutmann; Matthias Neuenkirch; Florian Neumeier |
| Abstract: | Although international sanctions are a widely used instrument of coercion, their economic effects are still not fully understood. This study uses a novel dataset and an event study approach to evaluate the economic consequences of international sanctions, thereby accounting for pre-treatment dynamics in countries subject to sanctions. Our analysis focuses on the effects of sanctions on GDP growths as well as various transmission channels through which sanctions affect economic activity. We document a significant negative effect of international sanctions on GDP growth and its components (consumption, investment, and government expenditures) as well as on trade and foreign direct investment. Additional panel difference-in-differences estimations reveal that this detrimental effect is driven by financial sanctions and US unilateral sanctions. |
| Keywords: | Economic growth, event study, international sanctions, transmission channels |
| JEL: | F43 F51 F52 F53 O43 O47 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:trr:wpaper:202103&r=all |
| By: | Ateeb Akhter Shah Syed; Kaneez Fatima; Riffat Arshad |
| Abstract: | The worries expressed by Alan Greenspan that the long run economic growth of the United States will fade away due to increasing burden of entitlements motivated us to empirically investigate the impact of entitlements of key macroeconomic variables. To examine this contemporary issue, we estimate a vector error-correction model is used to analyze the impact of entitlements on the price level, real output, and the long-term interest rate. The results show that a shock to entitlements leads to decrease in output and lends support to the assertion made by Alan Greenspan. Several robustness checks are conducted and the results of the model qualitatively remains unchanged. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2102.01609&r=all |