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on Economic Growth |
| By: | Popov, Vladimir; Konchakov, Roman; Didenko, Dmitry |
| Abstract: | This paper is an empirical test of what is called a unified theory of inequality and growth (Galor and Zeira, 1988, 1993; Galor and Moav, 2004; Galor, 2012) – in early stages of industrialization inequality enhanced the process of development by channeling resources towards individuals whose marginal propensity to save is higher, thus enhancing physical and human capital accumulation. In later stages of development, however, equality has stimulated human capital formation and growth and unequal distribution of income became a hurdle for economic development. A number of studies have found that human capital is higher and more evenly distributed in countries with lower income and wealth inequalities. In particular, Baten and Hippe (2018) argued that inequality in the distribution of land ownership in Europe (including Russia) in the 19th century had a negative impact on human capital formation (as measured by numeracy rate) as landowners did not have incentives to promote educational institutions or were not willing to pay the necessary taxes. In contrast, we find that in the regions of Russian Empire in 1897 uneven distribution of land was associated with higher levels of human capital (as measured by the average years of schooling and literacy rate), whereas the distribution of the human capital across the regional population (as measured by literacy and the proportions of inhabitants with higher, secondary and primary education) was more even. The difference in the results is caused by the different measurements of land inequality; our result is totally consistent with the unified theory of the inequality and growth. |
| Keywords: | educational attainment, school enrollment, inequality, land distribution, growth. |
| JEL: | D63 I23 J24 N93 R11 |
| Date: | 2024–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:119796&r=gro |
| By: | Mountford, Andrew |
| Abstract: | The determinants of an economy's growth path for income per head may vary over time. In this paper we apply unobserved components analysis to an otherwise standard panel model of economic growth dynamics so that an economy's long run relative income per head can change at any point of time. We apply this model to data for US states for 1929-2021 and the world economy for 1970-2019. In both datasets an economy's initial relative income per head is a good predictor of its long run relative income per head. Relatively poor economies on average remain relatively poor |
| Keywords: | Bayesian Econometrics, Economic Growth, State Space Models, Macroeconomics |
| JEL: | C11 E3 O47 |
| Date: | 2024–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:119938&r=gro |
| By: | NIREI Makoto; OIKAWA Koki; OROKU Masahiro |
| Abstract: | Patents applied by private firms occasionally cite scientific papers. We regard these citations as a signal that the research project of the applying firms involves basic research, and examine the relationship between basic research and firm performance. Firms conducting basic research are more likely to earn higher profit margins, while no monotonic relationship is observed between basic research and sales size. We then construct an endogenous growth model incorporating the basic research investment by heterogeneous firms. Firms' decisions regarding basic research depend on firm size, the necessity for basic research for developing their products, and the degree of knowledge spillover from external basic research results. Quantitative analysis using this model reveals how basic research spillover effects impact economic growth, and how declining R&D efficiency, which has been reported in the literature in recent years, leads to lower growth. Furthermore, we compare public basic research investment with basic research subsidies and demonstrate that the latter is more efficient as a growth policy. |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:24013&r=gro |
| By: | Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany); Julia Hellstrand (Max Planck Institute for Demographic Research, Rostock, Germany); Sampo Lappo; Angelo Lorenti (Max Planck Institute for Demographic Research, Rostock, Germany); Jessica Nisén (Max Planck Institute for Demographic Research, Rostock, Germany); Ziwei Rao; Heikki Tikanmäki |
| Abstract: | Future fertility is a key input when charting the sustainability of social security systems, and declining fertility is often expected to put pressure on economic indicators such as pension burden. Such expectations are based on a narrow view of the impact of fertility on the economy, focusing on age structure. Dynamic impacts – for instance, the potential for increased human capital of smaller cohorts – are mostly ignored. We use a dynamic longitudinal microsimulation model to explore to what extent investments in human capital could offset the adverse economic impact of low fertility. We implement our model in the Finnish context, which is a particularly interesting case as Finland is the fastest-ageing European country and experienced dramatic fertility declines and stagnant education levels in the 2020s. We find that an ambitious but simple human capital investment strategy that keeps the total investment constant despite declining cohort size, thereby increasing per-capita investment, can offset the negative impact of a smaller labor force on pension burden. Human capital investment not only reduces pension burden, but also increases working years, pension income, retirement years, and longevity. Policies focusing on human capital investment are likely to be a viable strategy to maintain economic sustainability. Keywords: low fertility, human capital investment, economic sustainability, Finland, dynamic longitudinal microsimulation model |
| JEL: | J1 Z0 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2024-002&r=gro |