Is the Green Solow Model Valid for $$\hbox {CO}_{2}$$ Emissions in the European Union?

This paper addresses the \(\hbox {CO}_{2}\) emission patterns of the European Union from 1950 to 2010, and examines the validity of the Green Solow model, which simulates \(\hbox {CO}_{2}\) emissions growth by including only Solow forces and assuming emission intensity growth to be exogenous and constant. This study verifies that an environmental Kuznets curve (EKC) trajectory exists for per capita \(\hbox {CO}_{2}\) emissions in the European Union, that emission intensity growth is decreasing over time, and that the decreasing intensity growth reflects variations of the dependent variable in the specifications of the Green Solow model. The critique by Stefanski (On the mechanics of the Green Solow model. OxCarre Research Paper 47, OxCarre & Laval University, Oxford, 2013) of the Green Solow model assumption of exogenous and constant intensity growth is validated. The EKC is defined as the emissions plotted against income and emission intensity is defined as the ratio of emissions to income. The EKC and emission intensity share identical definitions and similar transition trajectories over time. The transition of the EKC trajectory and decline in emission intensity growth began before worldwide attention was focused on global warming.     

Does the quality of institutions enhance savings? The case of Sub-Saharan Africa

Over the last three decades, there has been increasing disparity in savings across regions and income groupings globally. In this paper, we investigate whether the quality of institutions explains the saving disparities in Sub-Saharan Africa (SSA). Utilizing comprehensive panel data and spanning the period 1980–2015, we estimate a savings model using the two-step instrumental variable generalized method of moment (2SIV-GMM) estimator. Our results show that the impact of institutions on savings behaviour differs across regions and income groupings, and in SSA, in aggregate. We find that the level and growth of per capita income and terms of trade enhance savings whereas government consumption expenditure, financial sector development and the elderly dependency rate are savings impeding. The findings are robust to alternative model specification and highlight the importance of institutions in influencing savings behaviour in SSA.     

Openness and growth: The long shadow of the Berlin Wall

The question whether international openness causes higher domestic growth has been subject to intense discussions in the empirical growth literature. This paper addresses the issue in the context of the fall of the Berlin Wall in 1989. We analyze whether the slow convergence in per capita incomes between East and West Germany and the lower international openness of East Germany are linked. We address the endogeneity of openness by adapting the methodology proposed by Frankel and Romer (1999) to a panel framework. We instrument openness with time-invariant exogenous geographic variables and time-varying exogenous policy variables. We also distinguish the impact of different channels of integration. Our paper has three main findings. First, geographic variables have a significant impact on regional openness. Second, controlling for geography, East German states are less integrated into international markets along all dimensions of integration considered. Third, the degree of openness for trade has a positive impact on regional income per capita.     

Are living standards converging?

We re-address the convergence issue that is so prominent in the economic growth literature and present evidence as to what extent there is convergence across measures of living standards, alternative to capita income. The four additional indicators that we use are daily calorie supply, daily protein supply, infant mortality rates, and life expectancy at birth. We present results obtained using three techniques previously considered in growth empirics. These are cross-country regressions, distributional dynamics, and cluster analysis. Our main finding is that convergence in real GDP per capita does not imply convergence in other social indicators. However, the qualitative results for all indicators are the same in the sense that the persistent gap between the rich and poor does not only manifest itself in real GDP per capita but also in living standards.     

Structural Change and Economic Growth

This paper presents a model in which a country's measured average propensity to save endogenously rises when its economy industrializes. The model has agricultural and manufacturing sectors. Only agriculture uses land. If at early dates income per capita is low, agricultural consumption is important, land is valuable, and capital gains on land may constitute most wealth accumulation, leaving the country's NIPA APS low. If exogenous technological progress raises incomes over time, Engel's law shifts demand to manufactured goods. Then land's portfolio importance relative to reproducible capital diminishes and the national income and products account saving rate can rise.     

Economic openness and income growth in developing countries: a regional comparative analysis

This article examines and compares the openness–growth relationship between the high-performing Asian economies (HPAEs) and the rest of the developing world (Sub-Saharan Africa-SSA, South East Asia-SEA and Latin America and Caribbean-LAC). We applied the SYS-GMM estimator to a dynamic standard endogenous growth model which relates economic openness to real per capita income growth. A few key findings emerged from this study. First, economic openness led to increase in real per capita GDP growth in HPAEs and SSA, but not in LAC and SEA. Second, openness to trade accelerated income convergence among countries in SSA, SEA, and HPAEs, however, whereas foreign direct investment inflows accelerated income convergence only in SSA, it rather de-accelerated income convergence in HPAEs. Thirdly, the HPAEs recorded higher positive effect of openness on real per capita GDP growth than any of the other developing regions because they created sufficient stock of human capital that enhanced their absorptive capacity of imported advanced technology. They also created a more stable macroeconomic environment which consolidated the income growth gains from openness. The results of this study highlight the importance of the implementation of policies that are complementary to economic openness in promoting economic growth in the developing world.     

Do Natural Resources Depress Income Per Capita?

Most evidence for the resource curse comes from cross‐country growth regressions suffers from bias originating from the high and ever‐evolving volatility in commodity prices. These issues are addressed by providing new cross‐country empirical evidence for the effect of resources in income per capita. Natural resource dependence (resource exports) has a significant negative effect on income per capita, especially in countries with bad rule of law or bad policies, but these results weaken substantially once we allow for endogeneity. However, the more exogenous measure of resource abundance (stock of natural capital) has a significant negative effect on income per capita even after controlling for geography, rule of law and de facto or de jure trade openness. Furthermore, this effect is more severe for countries that have little de jure trade openness. These results are robust to using alternative measures of institutional quality (expropriation and corruption instead of rule of law).     

Does the Mortality Decline Promote Economic Growth?

This paper analyzes qualitatively and quantitatively the effects of declining mortality rates on fertility, education and economic growth. The analysis demonstrates that if individuals are prudent in the face of uncertainty about child survival, a decline in an exogenous mortality rate reduces precautionary demand for children and increases parental investment in each child. Once mortality is endogenized, population growth becomes a hump-shaped function of income per capita. At low levels of income population growth rises as income per capita rises leading to a Malthusian steady-state equilibrium, whereas at high levels of income population growth declines leading to a sustained growth steady-state equilibrium.     

Explaining Differences in Economic Growth among OECD Countries

This paper re-examines the determinants of growth of GDP per capita using panel data for OECD countries for the period 1970–1999 with data averaged over five-year periods from new perspectives. First, we introduce indicators of innovation input and technological specialization simultaneously into the empirical growth equation. Second, we employ the system-GMM (Generalized-Method-of-Moments) panel estimator that controls for (a) the possible specification bias when variables are highly persistent over time and (b) the possible simultaneity bias. We find a large and statistically significant impact of business enterprise R&D (BERD) intensity on GDP per capita with an elasticity of 0.22. The share of high-technology exports is also significantly positively related to GDP per capita, but the magnitude suggests that BERD is more important than technological specialization in explaining the level of GDP per capita. Furthermore, we find that the budget deficit and government consumption (both measured as percentages of GDP) and the volatility of growth are significantly negatively related to GDP per capita.The authors would like to thank Gunther Tichy for helpful comments on an earlier draft of this article. We also thank the participants of the Austrian economic association conference (NOEG) and the Empirical Industrial Organization workshop at the WU WIEN for helpful comments. We gratefully acknowledge financial support from the OeNB Jubiläumsfonds Project and the Austrian Federal Ministry for Economy and Labor (BMWA).JEL codes: E62, H20, H50, O23, O40     

Economic Distance and Cross-Country Spillovers

Rates of long-run economic growth are not independent across countries. To account for this dependence we decompose the spatial covariance function of growth rates into a function of each countrys own observable characteristics, its unobservable characteristics, and cross-country spillovers. We use original data on economic distance to structure observed variation in countries long term growth rates. We use this structure to estimate the magnitude of economic interdependence among nations, and to give a nonparametric characterization of the relationship between economic distance and the magnitude of cross-country spillovers. These spillovers turn out to be quite important, accounting for more of the spatial covariance in growth rates than unobservable variables, and by some measures rivalling the importance of the countrys own observable characteristics.     

Inequality in Spain, 1973-91: Contribution to a Regional Database

This paper provides the methodology and results of a database of inequality indices for the fifty provinces and seventeen regions of Spain on the basis of the Household Budget Surveys for the years 1973/74, 1980/81 and 1990/91. The inequality indicators considered are the indices of Gini, Theil (0), Theil (1) and Atkinson (1), as well as the distribution by deciles of the population. These indicators are drawn up for three variables: total income, total expenditure, and exclusively monetary expenditure. The variables are also expressed in terms of households, per capita and per capita equivalent. All are available on the Internet (http://www.ivie.es).     

Demographic Transition, Income Distribution, and Economic Growth

This article investigates the dynamic interactions among demographic transition, income distribution, and economic growth. Consistent with empirical evidence we show that fertility and income distribution follow an inverted U-shaped dynamics in the process of economic development. In the first stage fertility increases and income inequality widens, whereas in the second stage fertility declines, income becomes more equally distributed, human capital becomes more abundant, and growth of income per capita takes off. The model therefore generates the documented facts about epochs of demographic transition, relying neither on arguments based on near rationality nor on noneconomic objectives.     

The impact of product market competition on GDP per capita growth in the EU countries: does the model of capitalism matter?

This article assesses whether the intensity of product market competition is a factor affecting economic growth (measured by the growth rate of real GDP per capita) and whether this impact depends on the model of capitalism. The study covers the 1997–2015 period and all EU28 countries. Product market competition is measured by two types of variables: product market regulation indicators and the number of enterprises. New elements in the analysis include, among others, nonlinear impact and overlapping observations. The regression equations are estimated on the basis of Blundell and Bond’s GMM system estimator. The results generally indicate that stronger product market regulations (and theoretically lower product market competition) are linked with faster growth of output. However, the impact of product market competition on economic growth depends on the type of capitalism. For post-socialist countries, unlike the Western European model of capitalism, more regulation tends to reduce the rate of economic growth.     

Convergence in income inequality? evidence from panel unit root tests with structural breaks

This paper empirically tests whether there is evidence of convergence in income inequality, as predicted by several versions of the neoclassical growth model, using a large panel of annual data for the 48 contiguous states in the US over the 1916?C2005 period. By implementing the panel LM unit root test developed by Im et?al. (Oxford Bull Econ Stat 67:393?C419, 2005, Panel LM unit-root tests with trend shifts, Mimeo, 2010) that allows for the presence of structural breaks and heterogeneity in the panel, we find overwhelming evidence in support of convergence in income inequality. In addition, the results are robust to alternative inequality indicators used, different notions of stochastic convergence defined, and additional cross-sectional correlation considered.     

中国地区居民生活水平比较——基于全球夜间灯光数据

当衡量一国或地区居民生活水平时,统计学上一般有收入和消费两种视角。本文利用城乡住户调查中的人均可支配收入和国民经济核算中的居民消费水平,以全球夜间灯光数据为参照,综合收入端与消费端信息,对1997—2016年中国31个地区的真实生活水平进行比较分析。研究证实,灯光亮度与消费水平和人均可支配收入之间均存在显著的线性关系,可以用来估算真实生活水平。根据不同模型的回归结果得到,真实生活水平的最优无偏估计中消费水平的权重范围为（2795%,3831%）,人均可支配收入水平的权重范围为（6169%,7205%）。相对于消费水平,人均可支配收入更能准确地反映真实生活水平。本文进一步分析发现,样本期内居民生活水平增速小于人均GDP增速,可见经济的发展并未完全转化为生活水平的提高。中西部地区与东部地区的生活水平仍然存在巨大差距,东部地区的平均生活水平分别是中部和西部地区的17倍和21倍。     

States and Markets: The Advantage of an Early Start

In this paper, an index of the depth of experience with state-level institutions, or state antiquity, is derived for a large set of countries. We show that state antiquity is significantly correlated with measures of political stability and institutional quality, with income per capita, and with the rate of economic growth between 1960 and 1995. State antiquity contributes significantly to the explanation of differences in growth rates, explaining half of the differences in growth rates between countries like China and Mauritania, which are located at the two ends of the spectrum. It is also a good instrument for social infrastructure, which explains cross-country differences in worker productivity.     

Convergence clustering in the Chinese provinces: New evidence from several macroeconomic indicators

In this paper, the convergence clustering in 31 Chinese provinces regarding several important economic indicators over the period 1952 to 2016 was empirically investigated. Several provincial clusters were identified in the per capita (real) gross domestic product (GDP), consumption–income ratio, retail price, and consumer price inflation rates, using a club convergence and clustering procedure. The empirical findings are as follows. First, it was found that all series of the original data contain a significant nonlinear component. Second, it was observed that there are five significant clusters for the per capita income in China. Third, it was found that there are four significant clusters for the consumption–income ratio. Fourth, it was observed that there are four significant clusters for the retail inflation rates and two significant clusters for the consumer inflation rates in China. These results will enable local and central planners to implement economic growth, savings and price adjustment policies for different groups of provinces.     

Information Technology and the World Economy*

This paper addresses the impact of investment in information technology (IT) on the recent resurgence of world economic growth. We describe the growth of the world economy, seven regions and 14 major economies during the period 1989–2003. We allocate the growth of world output between input growth and productivity and find, surprisingly, that input growth greatly predominates! The contributions of IT investment have increased in all regions, but especially in industrialized economies and Developing Asia. Differences in per capita output are explained by differences in per capita input, rather than by variations in productivity.     

贸易开放、人力资本与 中国区域收入空间效应* ——基于地级及以上行政区域经验数据分析

本文基于中国326个地级及以上行政区域2010-2012年的数据,利用空间杜宾增长模型（SDM）来测算贸易开放对中国区域人均收入的影响。本文测算了各个区域贸易开放和人力资本对人均收入水平的直接、间接和总影响。结果表明：一个区域的贸易开放程度越高越能促进当地经济的发展,对相邻区域的人均收入也会产生正的影响。同时笔者也发现,人力资本对中国各个区域的经济增长会产生正的直接和间接影响。     

Culture and the demand for non-life insurance: Empirical evidences from middle-income and high-income economies*

This paper investigates the impact of culture on non-life insurance expenditure using a panel dataset covering 27 middle-income countries and 40 high-income countries in the period 1980–2014. Based on the two-step system GMM estimator, it is found that several cultural dimensions such as masculinity, uncertainty avoidance and power distance significantly explain the spending on non-life insurance in middle-income countries, while masculinity is the only cultural factor that significantly explains spending on non-life insurance in high-income countries. Traditional drivers of the demand for non-life insurance, such as per capita income, economic freedom and urbanization, also behave differently comparing between the two income-based groups of countries. These findings provide useful recommendations for business firms and policymakers around the world, especially transitional economies, to promote and sustain the development of the non-life insurance sector, which is an important engine for growth and prosperity.