|
on Economic Growth |
| By: | Kirill Borissov (Department of Economics, European University at St. Petersburg); Stefano Bosi (Université Paris-Saclay, Univ Evry, EPEE); Thai Ha-Huy (Université Paris-Saclay, Univ Evry, EPEE); Mikhail Pakhnin (Department of Applied Economics, University of the Balearic Islands, Université Paris-Saclay, Univ Evry, EPEE) |
| 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:eve:wpaper:23-05&r=gro |
| By: | Qixin Zhan (China Economics and Management Academy, Central University of Finance and Economics); Heng-fu Zou (The World Bank; Institute for Advanced Study, Wuhan University; Institute for Advanced Study, Shenzhen University) |
| Abstract: | This paper provides an examination of the crucial role played by the right to keep and bear arms in protecting individuals’ life, liberty, and property. Through our analysis, we demonstrate that the accumulation of firearms, serving as a means of safeguarding life, liberty, and property rights, leads to advancements in physical capital accumulation, output production, and overall welfare. Utilizing a robust mathematical model, we offer theoretical support for the natural right to bear arms, a principle deeply ingrained in ancient wisdom and enshrined in modern constitutional frameworks, notably exemplified by the Second and Fourth Amendments of the US Constitution. |
| Keywords: | Arms spending, Private property, Capital accumulation, Economic growth |
| JEL: | E20 E22 H56 O10 O40 P16 P48 |
| Date: | 2024–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:cuf:wpaper:626&r=gro |
| By: | António Afonso; M. Carmen Blanco-Arana |
| Abstract: | Financial inclusion is a key factor for economic growth in most developing countries. This paper examines the relationship between financial inclusion and Gross Domestic Product (GDP) per capita in the Least Developed Countries (LDCs) using panel data for the period 1990-2021. The empirical evidence suggests that financial inclusion is indeed related to economic growth in the LDCs. We consider different dimensions of financial inclusion: usability (% of bank credit to bank deposits), accessibility (commercial bank branches), concentration (% of concentration of banks) and availability (depositors with commercial banks) to determine which has a greater effect on economic growth in the countries analyzed. Therefore, we assess which dimensions of financial inclusion are a better tool to improve the economic situation in the poorest countries in the world. While we conclude that all dimensions of financial inclusion have a positive effect on economic growth, in the expected direction, we find that not all dimensions affect economic growth similarly. The dimensions ‘accessibility’ and ‘concentration’ are robustly associated with economic growth, while ‘usability’ and ‘availability’ produce a significant but relatively lesser effect in the LDCs. |
| Keywords: | Financial inclusion; GDP per capita; Panel data; LDCs |
| JEL: | O47 C33 F30 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp03162024&r=gro |
| By: | Shannon M. Pendergast; Judith A. Clarke; G. Cornelis van Kooten (Department of Economics, University of Victoria) |
| Abstract: | Sachs and Warner (1995) found a negative relationship between natural resources and economic growth, concluding that natural resources are a curse. This explanation for poor economic growth is now widely accepted. We provide an alternative econometric framework for evaluating the resource curse. We focus on resource rents and rent-seeking behaviour, arguing that rent seeking affects corruption and that, in turn, impacts wellbeing. Our measure of wellbeing is the Human Development Index, although we find similar results for per capita GDP. While resource abundance does not directly impact economic development, we find that natural resources are associated with rent seeking that negatively affects wellbeing, with results robust to various model specifications and sensitivity analyses. |
| Date: | 2024–03–21 |
| URL: | http://d.repec.org/n?u=RePEc:vic:vicddp:1002&r=gro |
| By: | Yuichi Furukawa (Chuo University and RIETI); Tat-kei Lai (IESEG School of Management, Univ. Lille, CNRS UMR 9221 - LEM - Lille Economie Management); Kenji Sato Sato (Osaka Metropolitan University) |
| Abstract: | This study develops a new dynamic general equilibrium model to explore the role of people’s love of novelty as a cultural preference in innovation and innovation-based growth. The model considers (a) an infinitely lived representative consumer who has standard love-of-variety preferences for differentiated products and additional love-of-novelty preferences for new products, and (b) technological progress driven by two costly and time-consuming innovation activities, new product development and existing product development. We demonstrate that consumers’ love of novelty is a source of innovation-based growth, wherein economies with a moderate love of novelty can achieve innovation and long-run growth through endogenous cycles between periods in which new product development is active and those in which existing product development is active. However, if love of novelty preference is too weak or too strong, the economy is caught in an underdevelopment trap with less innovation and no long-run growth. We also provide some suggestive empirical evidence that supports our theoretical predictions. |
| Keywords: | Cultural preferences, macro-based behavioral economics; innovation and growth cycles; endogenous growth; underdevelopment traps |
| JEL: | E71 O40 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:ies:wpaper:e202406&r=gro |
| By: | Pablo Martinelli Lasheras (Universidad Carlos III de Madrid, and Figuerola Institute); Dario Pellegrino (Bank of Italy) |
| Abstract: | This paper explores the role of landownership distribution in shaping the Italian post-WWII long-run growth experience (1951-2001). By exploiting an extraordinarily high-quality sub-national dataset, we find a strong and robust negative relationship between private landownership inequality and different measures of economic development and structural change during the Economic Miracle. Our results show that a relatively egalitarian agrarian milieu was conducive to the most successful growth model in post-WWII Italy: the ‘industrial districts’, the flexible network of small and medium-sized enterprises whose origins can be traced back to the 1950s. Widespread access to property and family farming was key to accelerating structural transformation. We find the effect of land inequality to be driven by the compression of the resources available to the lower-middle rural class. The intensity of sharecropping and rent-paying tenancy among non-owning farmers is also associated with higher growth, mitigating the growth-depressing effects of land inequality. The growth-enhancing effects of access to property are limited by minimum asset value levels and fade above a certain threshold, consistent with the existence of credit constraints and poverty traps that shape structural transformation in the long run. |
| Keywords: | land inequality, wealth distribution, structural change, long-run economic growth |
| JEL: | O1 O4 N3 Q1 R1 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:workqs:qse_52&r=gro |
| By: | Stefano Bosi (Université Paris-Saclay, Univ Evry, EPEE); Thai Ha-Hui (Université Paris-Saclay, Univ Evry, EPEE) |
| Abstract: | In this article, we consider a multidimensional economy where the standard supermodularity property fails. We generalize the notion of net gain of investment, introduced by Kamihigashi and Roy [7] and applied to one-sector growth models, to the case of multiple capital stocks. We prove the convergence to the set of steady states without relying on the monotonicity of optimal path. Our approach differs from the standard dynamic programming based on convexity or supermodularity. We find that preferences are key to shape the economy in the long run. |
| Keywords: | net gain of investment, multidimensional economy, nonconvexities |
| JEL: | C61 D51 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:eve:wpaper:23-07&r=gro |