Non-scale endogenous growth effects of subsidies for exporters

We built a general equilibrium endogenous growth model in which final goods are produced either in the relatively skilled-labour intensive exports sector or in the relatively unskilled-labour intensive domestic sector. We show that, by affecting the technological-knowledge bias, subsidies explain the simultaneous rise in the exports sector, the skill wage premium and the economic growth rate. Then, to shed light upon the causal nexus between production-related subsidies and exports, we use a Portuguese longitudinal database (1996–2003) and implement a propensity score matching approach. Empirical results seem to prove the theoretical predictions: subsidies generate the rise in the wage premium of exporters and the increase in the relative size of export sector, even if no impact of subsidies is found in the capacity of transforming domestic firms into new exporters.     

Costly investment, complementarities and the skill premium

We propose a new framework to analyse the relationship between the relative high-skilled labour endowment, the skill premium and economic growth. Building on Acemoglu and Zilibotti (2001), we introduce physical capital; internal costly investment in both capital and R&D; and complementarities between intermediate goods. We only find a positive relationship between the relative labour endowment and both the skill premium and economic growth within determined intervals of relative labour endowment values, which vary with the absolute productive advantage of high over low-skilled labour. The model thus accommodates theoretically mixed empirical results on the relative labour endowment-skill premium relationship. We further find that the impact on both the relative labour endowment and the skill premium of a rise in investment costs or in the complementarities degree depends on: (i) the absolute productivity advantage of high over low-skilled labour; and (ii) the relative labour endowment.     

The impact of public goods and services and public R&D on the non-observed economy size,wages inequality and growth

We develop a general equilibrium endogenous growth model in which final goods can be produced either in the Non-Observed Economy (NOE) or in the Official Economy (OE). In particular, by solving transitional dynamics numerically towards the unique and stable steady state, we show that, by affecting the technological-knowledge bias in favour of the OE, productive public goods and services and public policies promoting R&D explain the simultaneous rise in the OE size, the wage premium in favour of OE workers and the economic growth rate. These results are mainly in line with empirical evidence for developed countries, since the 1990s.     

Inter- and intracountry effects of the Covid-19 pandemic on wages and economic growth

This paper aims to investigate the impact of the Covid-19 pandemic on technological knowledge, wage inequality, and economic growth, by proposing a Direct-Technical-Change model with two economies, an Innovative and other Follower. Six hypotheses are considered: (i) decrease in the unskilled-labor supply, (ii) decrease in the absolute advantage of unskilled labor, (iii) decrease in the intensity of the unskilled sector, (iv) hypothesis (i) combined with a lower decrease in the skilled-labor supply, (v) hypothesis (ii) combined with a lower decrease in the absolute advantage of skilled labor, (vi) all the variations previously considered. By comparing the steady states before and after the shock, we find an increase in the technological-knowledge bias that favors the skill-intensive sector, which positively affects the skill premium. However, in hypotheses (i) and (iv), the decrease in the relative supply of unskilled labor dominates the effect on the skill premium, which thus decreases. The economic growth rate is always penalized except for hypothesis (iii). Hypotheses (ii) and (iv) are undesirable because they increase wage inequality and penalize economic growth. Governments should support innovative activity, the engine of technological-knowledge progress, and thus economic growth, but with caution not to exacerbate the skill premium.     

Learning-by-doing,technology-adoption costs and wage inequality

In the dominant literature, the technological-knowledge bias that drives wage inequality is determined by the market-size channel. We develop an endogenous growth model with two technologies in which: a specific quality of labour, low or high-skilled, is combined with a specific set of quality-adjusted intermediate goods; the market-size channel is practically removed; adoption costs and learning-by-doing are linked with labour endowments. By solving transitional dynamics numerically, we show that changes in the supply of labour affect learning-by-doing and technology-adoption costs, which, in turn, influence the technological-knowledge bias and thus wage inequality. The proposed mechanisms can accommodate facts not explained by the previous literature.     

Industrial de-licensing, trade liberalization, and skill upgrading in India

We investigate the relationship between industrial de-licensing, trade liberalization, and skill upgrading during the 1980s and 1990s among manufacturing plants in India. We use a unique dataset on India's industrial licensing regime to test whether industrial de-licensing during the 1980s and 1990s played a role in skill upgrading, as measured by the employment and wagebill shares of white-collar workers. In addition, we assess the relative contribution of industrial de-licensing and trade liberalization to skill upgrading. We identify two main channels through which industrial de-licensing affects skill upgrading: capital- and output-skill complementarities. Using both difference-in-differences as well as regression discontinuity techniques, we find two important results. First, after controlling for the size-based exemption rule that determined whether or not a plant faced licensing restrictions, industrial de-licensing during the 1980s appears to have increased the relative demand for skilled workers via capital- and output-skill complementarities. Capital- and output-skill complementarities exist for plants in both licensed and de-licensed industries but were stronger in de-licensed industries during the 1980s, prior to India's massive trade liberalization reforms in 1991. Second, regardless of de-licensing, capital- and output-skill complementarities are generally weaker after trade was liberalized during the early 1990s. Together, capital- and output-skill complementarities contributed 75% (57%) and 31% (29%), respectively, of the growth in the employment and wagebill shares of white-collar workers in de-licensed (licensed) industries before trade was liberalized. After trade liberalization, these contributions were smaller. This suggests that trade liberalization may not have played a major role in raising the relative demand for skilled labor during the early 1990s.     

Governance,resources and growth

Using a large sample of 50 oil exporting countries, we extend the prior literature by examining the role of quality of governance (QOG) on economic growth under the condition of heterogeneity and cross-sectional independence in errors. We document that QOG is by far the most consistent driver of economic growth both in the long- and short-run. Our result is robust to an alternative and an inverse measure of QOG. We also investigate a number of mediating factors contributing the QOG and economic growth linkage. We show that the long-run positive effect of QOG on economic growth is stronger in countries with higher information communication technology (ICT) diffusion; and such effect works only in countries with higher social capital, economic globalization, and financial development (FD). We also show that the ‘resource curse’ or ‘resource blessing’ debate in growth literature is sensitive to methodological choices.     

Could immigration explain wage inequality in a skill-biased technological model?

The aim of this paper is to evaluate how immigration of high-skilled workers affects the technological-knowledge bias and, in turn, the skill premium in the host countries, in particular bearing in mind the recent experience in a number of European countries. We study a skill-biased dynamic general equilibrium R&D growth model in which the standard R&D technology is modified so wage inequality results from the direction of the technological knowledge, which in turn is induced by the price channel. By solving the transitional dynamics numerically, we show that the rise of the skill premium arises from the price-channel effect, complemented with a mechanism that reflects the impact of immigration on R&D. According to our quantitative results, our model is able to account for a significant proportion of the dynamics of the skill premium in the data for a number of European countries, thus, suggesting that differences in labour skills between immigrants and natives are, in practice, an important source of skill premium variation over time.     

The role of social and technical excludability for the success of impure public good and common pool agreements: The case of international fisheries

We argue that international fisheries are a prime example to study the incentive structure of forming impure public good and common pool agreements. We consider a fully integrated multiple zone model, in which zones are linked through density-dependent migration. The incentive to accede to Regional Fishery Management Organizations (RFMOs) is related to multiple characteristics. Firstly, the relative patch sizes of the high seas, which is the internationally (publicly) accessible domain, compared to exclusive economic zones, which are state-owned (privately owned). This can be related to the degree of socially constructed excludability. Secondly, the intensity of fish migration between various zones, which can be related to the degree of technical excludability. Thirdly, the growth rate of the resource, which can be interpreted as the degree of rivalry, with a low (high) degree of rivalry approximating public good (common pool) features. We show that, generally, excludability reduces free-riding incentives but also the need for cooperation, a variant of the “paradox of cooperation”. Moreover, we show that the benefit-cost duality between public goods and common pool resources generally holds except for some extreme parameter values for which a low degree of rivalry fosters the success of cooperation. Finally, through a variation of the diffusion matrix, we can also analyze a closed as well as a sink-source system.     

A multi-region model of economic growth with human capital and negative externalities in innovation

We use a multi-region model and provide the first theoretical analysis of the effects of human capital use and a particular kind of innovative activity on economic growth. In each of the N heterogeneous regions in our model, consumers have constant relative risk aversion preferences, there are negative externalities in innovation, and there are three kinds of manufacturing activities involving the production of blueprints for inputs or machines, the inputs or machines themselves, and a single final good for consumption. Our analysis generates four salient findings. First, for each of the N regions, we define a balanced growth path equilibrium, we characterize the market clearing factor prices, and we determine the free entry condition in the R&D sector. Second, we show that without growth in human capital, there is no sustained economic growth in any of the N regions. Third, we show that human capital growth generates sustained economic growth in each of the N regions. Finally, when discussing the above three findings, we shed light on the spatial dimensions of economic growth in our multi-region aggregate economy.     

Variety of products,public capital,and endogenous growth

This paper develops an extension of the endogenous growth model with variety expansion presented in Romer [Romer, P.M., 1990. Endogenous technical change, Journal of Political Economy 98, part 2, S71–S102] by considering public capital accumulation. Characterizing the transitional dynamics, the growth rate of consumption traces (and available number of intermediate goods also might trace) an S-shaped converging path to the equilibrium growth rate, similar to a logistic growth curve, if the intensity of public capital is sufficiently high. We also show that public investment enhances economic growth because it stimulates demand for intermediate goods and raises the market interest rate.     

The long-term consequences of external debt: Revisiting the evidence and inspecting the mechanism using panel VARs

We estimate a panel vector autoregression model to examine the relationship between external debt and economic growth. We use a large dataset based on 123 countries, classified according to income levels over the period 1990–2015. While total external debt appears to have a negative effect on growth rate overall, it is positively associated with income growth in the lower- and upper-middle income countries. Further disaggregating external debt into its components reveals that public external debt negatively affects economic growth across all income categories of countries, whereas the impact of private external debt is not statistically significant. We do not detect a common threshold level in the relationship between public debt and economic growth across countries. Savings and investment are the primary channels through which external debt impacts economic growth. These results are robust to various model specifications, additional controls, and identifying restrictions.     

Complementarities and costly investment in a growth model

We develop a one-sector growth model whose key aspect is the combination of the assumptions of internal costly investment in capital and complementarities between capital goods in the production function. Despite the nonlinearity generated by these assumptions, the model delivers a single equilibrium.      

产业结构变动对区域经济增长贡献的空间分析--以河南省为例

产业结构变动是影响区域经济增长的重要因素。采用多部门经济模型和基于统计角度的GDP产业结构贡献度测算方法,以河南省为例,分析了1994—2003年10年来产业结构变动对经济增长的贡献,发现产业结构变动对区域经济增长贡献的空间差异明显,地区产业结构变动差异较大,各地产业结构调整进展不一。产业结构变动对区域经济增长的贡献与区域经济增长之间存在显著的负相关关系,经济增长率降低是结构调整的基本动力之一,而结构调整又成为经济增长的动力。影响产业结构变动对区域经济增长贡献的主要因素是区域产业结构政策和产业投资政策,人均GDP、年均GDP则与其不相关或弱相关。     

Economic growth and balance-of-payments constraint in Vietnam

Abstract

Our paper examines the long-run relation between economic growth and current account equilibrium in Vietnam, using a multicountry balance-of-payments-constrained growth model. We find that for the whole sample (1985–2010) Vietnam grew less than the rate predicted by the model. We also find that the balance-of-payments-constrained growth rate shifted after the 1997 Asian crisis. Since the relative price effect is neutral, the volume effects dominate in setting the balance-of-payments constraint. On the one hand, owing to the high income elasticities of exports, growth in advanced countries has a strong multiplier effect on the Vietnamese economy. On the other hand, this effect is hindered by a strong “appetite” for imports coming from Asia. Finally, we assess the impact of the current crisis on Vietnam’s growth for the period 2011 to 2017.     

Effects of North–South trade on wage inequality and on human-capital accumulation

This paper develops an endogenous growth model with technological knowledge directed towards high- versus low-skilled labour, augmented with North–South international trade of intermediate goods and with human-capital accumulation, to analyse how trade affects wage inequality and the inter-country human-capital gap. Trade is a vehicle for inter-country technological-knowledge diffusion and human-capital accumulation interacts with the intra-country direction of technological knowledge arising from trade. In contrast with the market-size effect, stressed in the skill-biased technological change literature, the operation of the price channel following openness to trade predicts, in line with the recent trends in developed and developing countries, an increasing technological-knowledge bias towards high-skilled human capital. This, in turn, decreases inter-country gaps of technological knowledge and human capital and increases intra-country wage inequality. Also in line with recent empirical evidence, inter-country wage convergence is induced by the trade-opening level effect.     

技术创新与产业结构转型的地区经济增长效应

选取2006-2016年中国内地30个省（市、区）数据,构建动态空间杜宾模型并结合中介效应模型,研究技术创新影响经济增长的直接效应,以及产业结构转型对经济增长的间接效应。研究结果发现：我国经济增长存在正向空间溢出效应;经济增长具有动态、积极的正向连续性特征。在直接效应方面,本地区技术创新对经济增长呈显著正向影响,而周边地区技术创新呈显著负向影响;产业结构合理化对经济增长呈显著负向影响,产业结构高级化呈显著正向影响;技术创新与产业结构转型融合缓解了产业结构合理化对经济增长的抑制程度,提升了产业结构高级化对经济的促进效果。在间接效应方面,产业结构转型是技术创新与经济增长的中间传导环节,产业结构合理化与产业结构高级化均为正向中介效应。本地区技术创新对经济增长的直接效应大于间接效应,周边技术创新对经济增长的直接效应小于间接效应。     

Economic growth, international trade and air pollution: A decomposition analysis

This study analyzes the impact of economic growth and international trade on the level of air pollution. This is done by the estimation of the Structural Equation Model with two factors describing the structure of economic activity and air pollution intensity. It is further assumed that there is causal link between these two factors and that they are influenced by per capita income, international trade intensity and the Freedom House Index.The estimation results suggest that in the developing countries analyzed both international trade and per capita income lead to changes in the structure of economic activity and - as a consequence - to the increase in air pollution. In addition, the estimation results suggest that the impact of economic growth on air pollution intensity varies between the developing and developed countries. In the developing countries, this impact occurs through the change of the structure of economic activity, while in the developed countries, this impact is mainly direct and occurs through the sum of the scale effect and income effect. The positive sign of this impact suggests the dominance of the scale effect over the income effect.     

Should a team be homogeneous?

Should an organization hire people with similar backgrounds or with different backgrounds? We formulate this question within the framework of team theory. The team is formed by n agents. The type of each agent is endogenous and determines his information structure and his cost for the team. We show that the sign of complementarity between jobs determines workforce homogeneity. With positive complementarities, the team should be composed of agents of the same type, while, with negative complementarities, workforce heterogeneity is optimal. These results do not rely on the restrictions on the way uncertainty is modeled or on the feasible set of agent types: they can be explained in terms of correlation between errors committed by different agents.     

Public Debt,Economic Growth and the Real Interest Rate: A Panel VAR Approach to EU and OECD Countries

ABSTRACT

We investigate the causal relationship between public debt ratios and economic growth rates for 31 EU and OECD countries. We estimate a panel VAR model that incorporates the long-term real interest rate on government bonds as a vehicle to transmit shocks in both the public debt to GDP ratio and the economic growth rate. We find no causal link from public debt to growth, irrespective of the levels of the public debt ratio. Rather, we find a causal relationship from growth to public debt. In high-debt countries, the direct negative impact of growth on public debt is enhanced by an increase in the long-term real interest rate, which in its turn decreases interest-sensitive demand and leads to a further increase in the public debt ratio.