|
on Economic Growth |
| By: | Becker, Sascha O. (Monash University and University of Warwick; CAGE, CEH@ANU, CEPR, CESifo, CReAM, IZA, ROA, Rockwool Foundation Berlin, and SoDa Labs); Rubin, Jared (Chapman University); Woessmann, Ludger (University of Munich, IFO Institute; Hoover Institution, Stanford University; CESifo, IZA, and CAGE) |
| Abstract: | We use the elements of a macroeconomic production function—physical capital, human capital, labor, and technology—together with standard growth models to frame the role of religion in economic growth. Unifying a growing literature, we argue that religion can enhance or impinge upon economic growth through all four elements because it shapes individual preferences, societal norms, and institutions. Religion affects physical capital accumulation by influencing thrift and financial development. It affects human capital through both religious and secular education. It affects population and labor by influencing work effort, fertility, and the demographic transition. And it affects total factor productivity by constraining or unleashing technological change and through rituals, legal institutions, political economy, and conflict. Synthesizing a disjoint literature in this way opens many interesting directions for future research. |
| Keywords: | religion, growth, Christianity, Judaism, Islam, preferences, norms, institutions, capital, saving, financial development, human capital, education, population, labor, demography, fertility, total factor productivity, technological change, rituals, political economy, conflict JEL Classification: Z12, O40, N30, I25, O15 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:684&r=gro |
| By: | Guillaume Vandenbroucke |
| Abstract: | An analysis of three rich and three poor countries found that countries where schooling grew faster also had less economic growth from 1960-2010. |
| Keywords: | rich countries; poor countries; schooling; economic growth |
| Date: | 2023–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:fip:l00001:97036&r=gro |
| By: | Philip Trammell; Anton Korinek |
| Abstract: | Industrialized countries have long seen relatively stable growth in output per capita and a stable labor share. AI may be transformative, in the sense that it may break one or both of these stylized facts. This review outlines the ways this may happen by placing several strands of the literature on AI and growth within a common framework. We first evaluate models in which AI increases output production, for example via increases in capital's substitutability for labor or task automation, capturing the notion that AI will let capital “self-replicate”. This typically speeds up growth and lowers the labor share. We then consider models in which AI increases knowledge production, capturing the notion that AI will let capital “self-improve”, speeding growth further. Taken as a whole, the literature suggests that sufficiently advanced AI is likely to deliver both effects. |
| JEL: | E2 O3 O4 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31815&r=gro |
| By: | B. Ravikumar; Amy Smaldone |
| Abstract: | Since 1960, the gap in GDP per capita between rich and poor countries has remained wide. Yet the gap in death rates has practically vanished during that period. |
| Keywords: | death rates; mortality; rich countries; poor countries; economic development; gross domestic product (GDP) per capita |
| Date: | 2023–10–02 |
| URL: | http://d.repec.org/n?u=RePEc:fip:l00001:97021&r=gro |
| By: | Kirill Borissov; Stefano Bosi; Thai Ha-Huy; Mikhail Pakhnin |
| Abstract: | We study a growth model with two types of agents who are heterogeneous in their degree of family altruism. We prove that every equilibrium path converges to a unique steady state, and study the effect of altruism on the properties of steady-state equilibrium. We show that aggregate income is positively related to both level of altruism and altruism heterogeneity. When altruism heterogeneity is low, income inequality follows an inverse U-shaped pattern relative to the level of altruism, which is consistent with the cross-country Kuznets curve. When altruism heterogeneity is high, income inequality monotonically decreases with the level of altruism. Our results suggest that heterogeneous altruism is an important mechanism linking economic growth and income inequality. |
| Keywords: | economic growth, heterogeneous agents, altruism, bequests, inequality, Kuznets curve |
| JEL: | D15 D64 E21 O40 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10717&r=gro |
| By: | Cuong Le Van (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CNRS - Centre National de la Recherche Scientifique, Thang Long University); Ngoc-Sang Pham (Métis Lab EM Normandie - EM Normandie - École de Management de Normandie); Thi Kim Cuong Pham (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This paper investigates the nexus between foreign aid (in both forms: grant and loan), poverty trap, and economic development in a recipient country by using a Solow model with two new ingredients: a development loan and a fixed cost in the production process. The presence of this fixed cost generates a poverty trap. We show that foreign aid may help the country to escape from the poverty trap and converge to a stable steady state in the long run, but only if (i) the country's characteristics, such as saving rate, initial capital, governance quality, and productivity are good enough, (ii) the fixed cost is relatively low, and (iii) the loan rule is generous enough. We also show that our model with foreign aid has room for endogenous cycles, unlike the standard Solow model. |
| Keywords: | Economic dynamics, economic growth, foreign aid, development loan, grant, poverty trap, endogenous cycle |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04240269&r=gro |
| By: | António Afonso; M. Carmen Blanco-Arana |
| Abstract: | Economic freedom and economic growth can be connected in most countries, but it is often necessary to specify those aspects of economic freedom that can foster economic growth. This paper examines the nexus between economic freedom and economic growth in the Least Developed Countries (LDCs) using panel data for the period 2000-2021. Results show that, in general, economic freedom positively influences economic growth in the LDCs. Moreover, most economic freedom factors raise economic growth. However, the effect of government spending, fiscal and financial freedom on economic growth is negative. Using a Principal Component Analysis for the economic freedom sub-indicators confirms the results. |
| Keywords: | economic freedom, economic growth, LDCs, financial development, panel data |
| JEL: | C23 G10 O10 O43 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp02972023&r=gro |
| By: | Ciccarelli, Carlo (University of Rome Tor Vegata); Fenske, James (University of Warwick and CAGE); Martí Henneberg, Jordi (Universitat de Lleida) |
| Abstract: | We show that the spread of the railway network slowed the decline of fertility in Europe during the late nineteenth and early twentieth centuries. We construct novel data on market access across sub-national regions in Europe and use both a panel fixed effects approach and an instrumental variables strategy that leverages variation in market access stemming from access to distant markets. We find that greater market access predicts higher fertility, with a standardized magnitude of 0.14. Consistent with an interpretation that market access increased fertility by raising incomes relative to the returns to child quality and the opportunity cost of childbearing, we show that our results are driven by locations that achieved higher levels of income per capita despite lagging in human capital and female labor force participation. |
| Keywords: | Economic History JEL Classification: |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:686&r=gro |
| By: | Ikonomou, Constantinos |
| Abstract: | The debate on Solow residual (SR), its extent and significance and the critic against the neoclassical growth equation (NGE) by endogenous and new growth theory (ENGT) have not managed to obliterate the contribution of NGE and of SR to the development of growth accounting and TFP measurement, to the convergence and competitiveness debates, the realization of productivity slowdown in industrialised economies and to real business cycle theory. After the proliferate critic of ENGT against NGE, other critics were left unattended, for example that by Domar on the non-incorporation of intermediate goods in growth equations. Moreover, significant amendments in the calculation of capital by OECD had unveiled its underestimation and, subsequently, TFP overestimation. The contribution of each specific type of investment to capital and subsequently to growth has also been underestimated in growth equations. This was made clearer through DeLong and Summers studies and the distinction between equipment and infrastructure investment but it was also claimed much earlier by the concept of accelerator and the various distinctions of investment types used in economics. The proclaimed “death” of NGE has harmed economic growth studies by contributing in the displacement of decreasing returns and perfect competition from their disciplinary throne. While most economists gregariously espoused such a disciplinary path, this article seeks to refresh economic thinking in growth models, by creating a new growth model that comprises labour -apart from capital- and integrates an additional, aggregate growth component that encapsulates ENGT variables and intermediate inputs. Few but significant implications for growth theory and policy are discussed. |
| Keywords: | Solow residual Neoclassical Growth Equation Endogenous Growth Theory Capital Equipment Investment Decreasing Returns Perfect Competition Intermediate inputs |
| JEL: | E1 E22 E23 E32 O1 O4 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:119003&r=gro |
| By: | Asep Suryahadi; Daniel Suryadarma; Sudarno Sumarto |
| Keywords: | economic growth, poverty, urban, rural, Indonesia |
| URL: | http://d.repec.org/n?u=RePEc:agg:wpaper:352&r=gro |
| By: | Broadberry, Stephen (Nuffield College, Oxford); Lennard, Jason (London School of Economics) |
| Abstract: | The modern business cycle features long expansions combined with short recessions, and is thus related to the emergence of sustained economic growth. It also features significant international co-movement, and is therefore associated with growing market integration and globalisation. When did these patterns first appear? This paper explores the changing nature of the business cycle using historical national accounts for nine European economies between 1300 and 2000. For the sample as a whole, the modern business cycle emerged at the end of the eighteenth century. |
| Keywords: | Business cycle; economic growth; Europe JEL Classification: N10, E32, O47 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:683&r=gro |
| By: | Armand Arief Sim; Daniel Suryadarma; Asep Suryahadi |
| Keywords: | child labor, human capital, skills, health, Indonesia |
| URL: | http://d.repec.org/n?u=RePEc:agg:wpaper:306&r=gro |
| By: | Ridolfi, Leonardo (University of Siena); Salvo, Carla (Sapienza University of Rome); Weisdorf, Jacob (Sapienza University of Rome, CAGE, & CEPR) |
| Abstract: | We use the two earliest industrial censuses from 19th-century France to investigate the impact on industrial labour of one of the largest waves of mechanisation in history, the diffusion of steam power. We establish using OLS and IV analyses that wages and employment both grew significantly more among steam-adopting industries compared to their non-adopting peers. Growth in total revenue was also significantly higher among steam adopters while labour’s share did not change significantly compared to nonadopters. These findings dispute the common view that the historical modernisation of industry set labour back in absolute terms or relative to capitalists. |
| Keywords: | Capitalists, industrialisation, inequality, labour, mechanisation, productivity, technological progress, wages JEL Classification: I15, J42, J31, L92, O14, O33 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:689&r=gro |
| By: | Réka Juhász; Claudia Steinwender |
| Abstract: | We discuss recent work evaluating the role of the government in shaping the economy during the long 19th century, a practice we refer to as industrial policy. We show that states deployed a vast variety of different policies aimed at, primarily, but not exclusively, fostering industrialization. We discuss the thin, but growing literature that evaluates the economic effects of these policies. We highlight some fruitful avenues for future study. |
| Keywords: | industrial policy, first wave of globalization, industrialization, infant industry protection, technology policy, transport infrastructure, telegraph, 19th century |
| JEL: | L50 N10 N40 N60 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10675&r=gro |
| By: | Asep Suryahadi; Gracia Hadiwidjaja; Sudarno Sumarto |
| Keywords: | poverty, sectoral growth, Asian financial crisis, growth elasticity |
| URL: | http://d.repec.org/n?u=RePEc:agg:wpaper:300&r=gro |