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on Economic Growth |
| By: | Uwe Sunde; Thomas Dohmen; Benjamin Enke; Armin Falk; David Huffman; Gerrit Meyerheim |
| Abstract: | This paper studies the relationship between patience and comparative development through a combination of reduced-form analyses and model estimations. Based on a globally representative dataset on time preference in 76 countries, we document two sets of stylized facts. First, patience is strongly correlated with per capita income and the accumulation of physical capital, human capital and productivity. These correlations hold across countries, subnational regions, and individuals. Second, the magnitude of the patience elasticity strongly increases in the level of aggregation. To provide an interpretive lens for these patterns, we analyze an OLG model in which savings and education decisions are endogenous to patience, aggregate production is characterized by capital-skill complementarities, and productivity implicitly depends on patience through a human capital externality. In our model estimations, general equilibrium effects alone account for a non-trivial share of the observed amplification effects, yet meaningful externalities are needed to quantitatively match the empirical evidence. |
| Keywords: | Time Preference, Comparative Development, Factor Accumulation |
| JEL: | D03 D90 O10 O30 O40 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2021_293v2&r=gro |
| By: | Teodor Sedlarski (Sofia University St. Kliment Ohridski, Faculty of Economics and Business Administration, Department of Economics); Ilia Atanasov (Sofia University St. Kliment Ohridski, Faculty of Economics and Business Administration, Department of Economics); Alexandra Korcheva (Sofia University St. Kliment Ohridski, Faculty of Economics and Business Administration, Department of Economics) |
| Abstract: | We develop an endogenous growth model in which informal practices, trust and transaction costs take the key role and dictate the speed of the long-term economic development. A decision maker chooses how much informal behaviour to allow in the economic system in order to maximize the rate of innovation by taking into account the productivity gains and loses associated with building trust and lowering transaction costs. The model shows that economic systems in which changes in informal practices are taken into account will grow at a faster rate compared to economic systems in which the same changes are ignored. This provides an alternative explanation to divergence in output per capita between different countries from the point of view of the new institutional economics. |
| Keywords: | economic growth, informal institutions, new institutional economics |
| JEL: | D23 E71 O17 O43 Z1 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:sko:wpaper:bep-2023-02&r=gro |
| By: | Štěpán Mikula (Masaryk University, Brno, Czech Republic); Tommaso Reggiani (Masaryk University, Brno, Czech Republic, Cardiff University, Cardiff Business School, Cardiff, United Kingdom, Sapienza University of Rome, Italy); Fabio Sabatini (Sapienza University of Rome, Italy, IZA, Bonn, Germany) |
| Abstract: | We exploit a historical experiment that occurred in Czechoslovakia after World War Two to study the drivers of social capital accumulation in an extremely unfa- vorable environment. Between 1945 and 1948, the Sudetenland became the scene of ethnic cleansing, with the expulsion of nearly three million German speakers and the simultaneous influx of nearly two million resettlers. Focusing on the areas where at least 90% of the population was forced to leave, we show that the municipalities hosting a church built before 1945 developed significantly higher social capital under the communist rule, which persisted after the dissolution of Czechoslovakia and the current days. |
| Keywords: | Institutions, migration, conflict, social capital, religion, transition countries |
| JEL: | D74 L31 N24 N44 N94 O15 Z12 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:mub:wpaper:2023-03&r=gro |
| By: | Kazuo Nishimura (RIEB, Kobe University - Kobe University); Florian Pelgrin (EDHEC - EDHEC Business School - UCL - Université catholique de Lille); Alain Venditti (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Following the recent contribution of Beaudry et al. [8], we exploit a three-sector optimal growth model without frictions to provide new insights regarding the emergence of endogenous medium-term fluctuations. Notably, our 3-sector model shows that matching the empirical evidence critically depends on agents' preferences, particularly the consumption of a bundle of (at least) two final goods. Endogenous fluctuations are therefore likely to occur through both relative inter-sector differences in capital intensity and intertemporal consumption allocations based on substitution effects between the two final consumed goods. We thoroughly characterize the economy's dynamics and establish the existence of clear conditions related to (Hopf) bifurcation values, as well as closely examining the theoretical periodicity of the corresponding limit cycles. Using a calibration of the US economy, our model is able to reproduce the observed peak range of spectral density at around 8 to 10 years of the cyclical component of gross domestic product, gross private investment, personal consumption expenditures, and of the corresponding price deflator series. Furthermore, such limit cycles are generated under very plausible technological parameters and estimates of the elasticities of intertemporal substitution. |
| Keywords: | mid-term fluctuations, Hopf bifurcation, endogenous cycle, periodicity, Three-sector optimal growth models |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03923999&r=gro |
| By: | Minoru Watanabe (Hokusei Gakuen University) |
| Abstract: | The current study aimed to develop a standard overlapping generations model incorporating involuntary unemployment caused by the union wage setting and fertility choice within an endogenous growth framework. Our study assumes that capital income tax finances in work benefits, which is the income transfer conditioned on work. The results indicate that increasing capital income tax promotes employment and hence promotes economic growth. Further, we demonstrate that a rise in capital income tax improves fertility. |
| Keywords: | Capital income tax, Involuntary unemployment, Fertility |
| JEL: | H55 J13 J51 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:2302&r=gro |
| By: | Stylianou Kalaitzi, Athanasia; Al-Awadhi, Ahmad; Al-Qudsi, Sulayman; Chamberlain, Trevor W. |
| Abstract: | This study examines whether export diversification can foster sustained economic growth in Kuwait, using time series analysis for the period 1980–2019 and a field survey of one hundred Kuwait business leaders engaged in import and export of goods and services. The time series analysis reveals that there is no causality between export diversification and economic growth in the short-run. However, an indirect causality runs from export diversification to economic growth, and vice versa, via imports. In the long-run, no causality runs from export diversification to economic growth, but economic growth does cause export diversification. The field survey results indicate that there is a consensus among Kuwaiti CEOs that there are positive spillover effects from exports and imports to producers of local goods and services, and that imports are conductive to economic diversification. |
| JEL: | N0 L81 |
| Date: | 2023–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:118060&r=gro |
| By: | Avner Greif (Stanford University); Jared Rubin (Chapman University) |
| Abstract: | This paper highlights the importance of endogenous changes in the foundations of legitimacy for political regimes. Specifically, it highlights the central role of legitimacy changes in the rise of constitutional monarchy in England. It first highlights the limitations of the consensus view regarding this transition, which claims that Parliament’s military power enabled it to force constitutional monarchy on the Crown after 1688. It then turns to define legitimacy and briefly elaborates a theoretical framework enabling a historical study of this unobservable variable. The third and primary section substantiates that the low-legitimacy, post-Reformation Tudor monarchs of the 16th century promoted Parliament to enhance their legitimacy, thereby changing the legislative process from the Crown-and-Parliament to the Crown-in-Parliament that still prevails in England. |
| Keywords: | political legitimacy, England, Reformation, Parliament, constitutional governance |
| JEL: | N44 N33 D02 D73 P48 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:23-01&r=gro |
| By: | Adelaide Baronchelli (Department of Economics (University of Verona)); Roberto Ricciuti (Department of Economics (University of Verona)); Mattia Viale (Department of Economics (University of Verona)) |
| Abstract: | This paper studies the effect that the plague in 1348 had on the structure of power in Venice. Using data from “The Rulers of Venice, 1332-1524” dataset, we conceptualize the Venetian structure of power as a two-mode network where relevant political houses are associated with the offices their members were elected. We find that, after the shock of the Black Death, the major houses were able to cling to power and even increase their importance. |
| Keywords: | Political elite; Economic elite; Black Death; Venice. |
| JEL: | N43 C45 D71 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:ver:wpaper:01/2023&r=gro |
| By: | Morgane Laouenan (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po, CNRS - Centre National de la Recherche Scientifique); Palaash Bhargava (Department of Economics Columbia University - Columbia University [New York]); Jean-Benoît Eyméoud (LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po); Olivier Gergaud (LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po); Guillaume Plique (médialab - médialab (Sciences Po) - Sciences Po - Sciences Po, Kedge BS - Kedge Business School); Etienne Wasmer (New York University [Abu Dhabi] - NYU - NYU System, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po) |
| Abstract: | A new strand of literature aims at building the most comprehensive and accurate database of notable individuals. We collect a massive amount of data from various editions of and . Using deduplication techniques over these partially overlapping sources, we cross-verify each retrieved information. For some variables, adds 15% more information when missing in . We find very few errors in the part of the database that contains the most documented individuals but nontrivial error rates in the bottom of the notability distribution, due to sparse information and classification errors or ambiguity. Our strategy results in a cross-verified database of 2.29 million individuals (an elite of 1/43, 000 of human being having ever lived), including a third who are not present in the English edition of . Data collection is driven by specific social science questions on gender, economic growth, urban and cultural development. We document an Anglo-Saxon bias present in the English edition of , and document when it matters and when not. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03930666&r=gro |
| By: | Mr. Anil Ari; Gabor Pula; Liyang Sun |
| Abstract: | The qualitative and granular nature of most structural indicators and the variety in data sources poses difficulties for consistent cross-country assessments and empirical analysis. We overcome these issues by using a machine learning approach (the partial least squares method) to combine a broad set of cross-country structural indicators into a small number of synthetic scores which correspond to key structural areas, and which are suitable for consistent quantitative comparisons across countries and time. With this newly constructed dataset of synthetic structural scores in 126 countries between 2000-2019, we establish stylized facts about structural gaps and reforms, and analyze the impact of reforms targeting different structural areas on economic growth. Our findings suggest that structural reforms in the area of product, labor and financial markets as well as the legal system have a significant impact on economic growth in a 5-year horizon, with one standard deviation improvement in one of these reform areas raising cumulative 5-year growth by 2 to 6 percent. We also find synergies between different structural areas, in particular between product and labor market reforms. |
| Keywords: | Structural reforms; institutions; economic growth; C. PLS estimation procedure; machine learning approach; Gabor pula; Liyang sun; labor market composite; Business environment; Labor markets; Machine learning; Labor market reforms; Global |
| Date: | 2022–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2022/184&r=gro |
| By: | Horrell, Sara |
| Abstract: | Existing long-run consumer price indices for England rely on a fixed consumption basket. Here we construct a methodologically improved, chained-Laspeyres price index for ordinary households based on their changing expenditure patterns between 1260 and 1869. Rather than offering a revisionist perspective on long-run costs, it confirms the broad accuracy of existing indices for the pre-industrial period. The dominant dependence of the key items of expenditure on agricultural, particularly arable, prices explains this finding. The industrial period introduced a new dynamic. The shift in household expenditure towards imported groceries and manufactured goods allowed more substitution in response to relative price and income changes. Adding the current series to those chained-Laspeyres indices available for later periods provides a CPI for ordinary households in England over nearly eight centuries, 1260 to the present day. |
| Keywords: | consumer price index; consumption; household expenditure; living standards; England; long-run |
| JEL: | D10 D12 |
| Date: | 2023–01–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:117518&r=gro |