Economic Convergence in the African Continent: Closing the Gap

The paper attempts to analyse the conditional β‐convergence and its sources for 32 African countries over the period 1960‐2008. The augmented Solow model with both gross domestic product (GDP) per worker and per capita income is estimated using the dynamic system generalized methods of moments (GMM) technique with the panel data. This is the first study on the sources of conditional β‐convergence for African countries. According to the results of the augmented Solow model, income convergence rates are lower than those of GDP per worker. Moreover, total factor productivity convergence, human capital convergence and capital labour convergence are contributing towards the convergence of GDP per worker in Africa. This means that growth in the poorest African countries is being augmented by “catch‐up factor,” which is good news for them. However, convergence in terms of GDP per worker is not being fully translated into income per capita convergence. The demographic structure in the African continent with its record of persistent population growth has played an important role in lowering the income convergence of its countries.     

Human capital and growth in Japan: Converging to the steady state in a 1% world

Annual growth in GDP/adult in Japan has declined from over 10% in 1969 to an average of 1% since the financial crisis in 1991. I show that a dynamic Solow growth model, augmented with human capital, weekly hours worked, and oil prices, explains Japan’s annual growth rates from 1969 to 2007 as conditional convergence to a steady-state rate of 1%/year. Each year of average adult schooling attainment raised GDP/adult directly or indirectly by 20 percent, and weekly hours worked had an output elasticity of 0.5. The marginal product of schooling in 2005 is double the marginal product of physical capital.     

Fertility,income distribution,and economic growth: theory and cross-country evidence

The authors perform discriminatory, empirical tests of a theoretical model that predicts that family size adversely affects output per capita and nonsteady state growth rates. Neoclassical models posit that adverse output and nonsteady growth rates are affected by labor force growth (LFG) or population growth (PG). This study tests whether family size (FS) will be more significant than LFG or PG in explaining differences in economic growth (EG) rates across countries during 1960-88. A proxy variable for the public education system was used to separate government interventions on human capital formation from market forces. Data were obtained for 73 countries, which exclude centrally planned economies, oil-producing countries, and those with less than 1 million population. The empirical test is run with 58-country, 45-country, and 96-country samples to test for robustness and reliability. The empirical test supports the theoretical model. It demonstrates that equal distribution of income and smaller FS enhance EG. With income inequality, the effect of FS was significant, and the effect of the LFG rate or PG rate was insignificant. With a given FS, LFG was positively correlated with EG. A reduction of the net fertility rate by one point would increase the worker output growth rate by 0.25%, and the differences in growth rates between high- and low-fertility countries would be 1%. An increase in the income share of the bottom 60% would increase the growth rate of worker output by about 1%. Higher investments in public or private education would be conducive to growth.     

The Great Growth Debate: A Statistical Look at Mankiw,Romer, and Weil, <Emphasis Type="Italic">versus</Emphasis> Islam

This paper takes a purely statistical look at two of the most important empirical growth papers authored by Mankiw et al. [1992] and Islam [1995]. MRW claim that the Solow model is justified only when human capital is added to the regression, while Islam claims that cross-country heterogeneity is the actual culprit. In a statistical sense, the author of this study finds that Islam was correct in the fact that mean heterogeneity does exist in MRWs data. However, after statistical adequacy is achieved, human capital continues to maintain its role as a significant determinant of growth even though the estimates are not robust for one of the two cross-country samples investigated. On the other hand, though Islams models were not without statistical problems, they continue to maintain their traditional form and his estimates are robust to respecification. This paper also exemplifies the need for objective statistical testing methods in applied work.     

Openness and economic growth in developing countries

Openness and Economic Growth in Developing Countries. — Openness appears to have a strong impact on economic growth especially in DCs which typically exhibit a high share of physical capital in factor income and a low share of labor. In the neoclassical growth model with partial capital mobility, physical capital’s share in factor income determines the difference in the predicted convergence rates for open and closed economies. With a 60 percent share as in many DCs, the convergence rates should differ by a factor of 2.5. The regression results for a sample of open and closed DCs roughly confirm this hypothesis.     

The impact of foreign direct investment and human capital on economic growth: Evidence from Chinese cities

Using a panel of Chinese cities over the period 1991–2010, we examine the determinants of economic growth, focusing on the role of foreign direct investment (FDI) and human capital. Consistent with the predictions of a human capital-augmented Solow model, we find that the growth rate (along the path to the steady-state income level) of per capita GDP is negatively correlated with population growth rate and positively correlated with investment rate in physical capital and human capital. We find that FDI has a positive effect on the per capita GDP growth rate and this effect is intensified by the human capital endowment of the city. The latter suggests that one way that human capital contributes to growth is to serve as a facilitator for technology transfers stemming from FDI. Furthermore, we find some suggestive evidence that the FDI-human capital complementary effect is stronger for technology-intensive FDI than for labor-intensive FDI. Our results are robust to alternative measures of human capital, model specifications, and estimation methods.     

THE IMPACT OF HIV/AIDS ON ECONOMIC GROWTH IN SUB‐SAHARAN AFRICA1

This study investigates the hypothesis that HIV/AIDS epidemic slows down the pace of economic growth. We examine 41 Sub‐Saharan African countries by using the empirical growth equation in an augmented Solow model in which health capital serves as a determinant of human capital. Econometric analysis is based on panel data and covers the period 1997‐2005. We control for a variety of factors possibly correlated with HIV prevalence that might also influence economic growth. As a key result we prove that the epidemic has a significant negative effect on the growth rate of per capita GDP in Sub‐Saharan Africa.     

Health,education, and economic growth in China: Empirical findings and implications

This empirical analysis examines the augmented Mankiw, Romer and Weil's model which considers both health and education in human capital in the framework of Chinese economy. We consider the relationship between per capita real GDP growth and the physical capital, human capital, and health investment in the production function. Panel data models are used in the estimation based on the provincial data from 1978–2005. The empirical evidence shows that both health and education have positive significant effects on economic growth. The results also show that the interaction of health and education stock will not reduce their impact on growth and there is perhaps a trade-off between two forms of human capital investment.     

教育公共投入与收入差距的波及效应

在对城乡教育公共投入差异的分析基础上,运用卢卡斯的新经济增长理论框架,采用面板数据常用的固定效应模型估计人力资本及其外溢效应对城乡收入差异的影响。实证研究发现,人力资本对城乡收入增长均有较强的促进作用,且农村人力资本的产出弹性明显高于城市。但与城市相比,农村人力资本的外溢效应偏低,这在一定程度上拉大了业已存在的城乡差距。     

Long-Run Economic Performance and the Labor Market

This article uses a simple variation of the Solow model to study the interrelations between economic growth and the labor market. We show, both analytically and empirically, that income and capital per worker in the steady state depend positively on flexibility of the labor market; that the steady-state unemployment rate depends positively on the rate of population growth and the productivity growth rate and negatively on the savings rate and flexibility of the labor market; and, finally, that labor market flexibility affects convergence toward steady state.     

中国经济增长来源实证研究-基于扩展的索洛模型

依据新古典经济增长理论,建立扩展的索洛模型,对物质资本、人力资本以及全要素生产率对中国经济增长的贡献进行实证分析,得出人力资本对我国经济增长的贡献度大于物质资本,以技术进步为代表的全要素生产率增长呈现阶段性特征,是转型期经济可持续增长源动力的结论。     

MIGRATION AND ECONOMIC GROWTH IN BRAZIL: EMPIRICAL APPLICATIONS BASED ON THE SOLOW‐SWAN MODEL

The paper addresses the question of whether migration plays a role in the determination of the per capita incomes in sub‐regions of Brazil. In order to discuss this relationship, we slightly modified the Solow‐Swan model with migration to better resemble the Brazilian context. Based on this model, we determined theoretically five different possibilities for the spatial dynamics regarding net migration, human capital differentials between migrants and nonmigrants, and capital stock per effective worker. We applied this framework to census data and the microregions in Brazil were empirically classified in one or other of these possibilities with the multivariate technique of cluster analysis. Finally, we used econometric models with instrumental variables applied to panel data and observed a tendency of increase in the variability of per capita income due to migration.     

The Solow model in the empirics of growth and trade

Translated to a cross-country context, the Solow model (Solow,1956) predicts that international differences in steady-stateoutput per person are due to international differences in technologyfor a constant capital–output ratio. However, most ofthe empirical growth literature that refers to the Solow modelhas employed a specification where steady-stateifferences inoutput per person are due to international differences in thecapital–output ratio for a constant level of technology.My empirical results show that the former specification cansummarize the data quite well by using a measure of institutionaltechnology and treating the capital–output ratio as partof the regression constant. This reinterpretation of the cross-countrySolow model provides an implication for empirical studies ofinternational trade. Harrod-neutral technology differences,as presumed by the Solow model, can explain why countries havedifferent factor intensities and may end up in different conesof specialization.     

The Effects of Remittances on Output per Worker in Sub‐Saharan Africa: A Production Function Approach

This paper uses a production function to examine the channels through which remittances affect output per worker in 31 Sub‐Saharan African countries from 1980 to 2010. Lagged remittances increase physical capital per worker, average years of schooling and total factor productivity, but the effectiveness of remittances varies with the income level of the recipient nation. Although remittances have increased both physical capital and total factor productivity among the upper middle income nations, among the lower middle income, they have increased only the physical capital. Meanwhile a reduction in institutional risk has encouraged investment and efficiency, but its relationship to the effectiveness of remittances has been inconclusive.     

Solow vs. Solow: Notes on Identification and Interpretation in the Empirics of Growth and Development

Most empirical studies of long-run growth refer to one of the two seminal contributions by Robert Solow in 1956 and 1957. His work shows that in order to estimate the relative roles of factor accumulation and technology in development, an a priori identification assumption is needed about the nature of technical change. This specific assumption differs across the two Solow papers. I show that starting with the identification assumption made by Solow in 1956, one should expect to find that differences in technology rather than differences in factor accumulation explain most if not all of the observed long-run differences in output per worker. The opposite interpretation appears to prevail in parts of the recent literature on the empirics of growth. JEL no. O4     

Engels’ pause: Technical change, capital accumulation, and inequality in the british industrial revolution

The paper reviews the macroeconomic data describing the British economy from 1760 to 1913 and shows that it passed through a two stage evolution of inequality. In the first half of the 19th century, the real wage stagnated while output per worker expanded. The profit rate doubled and the share of profits in national income expanded at the expense of labour and land. After the middle of the 19th century, real wages began to grow in line with productivity, and the profit rate and factor shares stabilized. An integrated model of growth and distribution is developed to explain these trends. The model includes an aggregate production function that explains the distribution of income, while a savings function in which savings depended on property income governs accumulation. Simulations with the model show that technical progress was the prime mover behind the industrial revolution. Capital accumulation was a necessary complement. The surge in inequality was intrinsic to the growth process: technical change increased the demand for capital and raised the profit rate and capital’s share. The rise in profits, in turn, sustained the industrial revolution by financing the necessary capital accumulation. After the middle of the 19th century, accumulation had caught up with the requirements of technology and wages rose in line with productivity.     

Human Capital and Economic Growth in Asia 1890–2000: A Time‐series Analysis*

There is a general consensus that human capital is a major factor behind long‐run economic growth. Yet, on a macro level, the empirical results do not always seem to concur with this view. To explain this gap between theory and empirics, more focus has been laid on measurement error and data quality. Using an alternative estimate of the stock of human capital, based on Judson (2002), we find evidence that the two major views on the role of human capital in economic development by Lucas (1988) and Romer (1990) coexist and are by no means mutually exclusive. Using a Johansen cointegration test, we find that in India and Indonesia the level of human capital is cointegrated with the level of aggregate income during the whole 20th century, which confirms the theory of Lucas (1988). In Japan, however, the Lucasian approach can be verified only for the first half of the century, while after 1950 there is cointegration between the growth rate of aggregate income and the level of human capital, which is in line with Romer's view.     

A simultaneous estimation of Environmental Kuznets Curve: Evidence from China

This paper uses Chinese provincial data from 1993 to 2002 to examine the existence of an Environmental Kuznets Curve (EKC) relationship between per capita income and per capita pollutant emission. Acknowledging the theoretical framework that economic growth and pollution are jointly determined, this paper starts from formulating a simultaneous equations model (SEM) to investigate the relationship between income and pollutant emission. A Hausman test is applied for income exogeneity and a two-stage least squares (2SLS) method is used to estimate the SEM. There are three main differences found between single polynomial equation estimators commonly used in EKC literatures and simultaneous equationa estimators. Since these differences tend to cause different policy implications, therefore, this paper suggests that the simultaneity between income and pollution should be considered before regressing the model in future EKC studies. In addition, this paper also investigates the determinants of income and government pollution abatement expense. Negative impact of pollution on income, and positive effects of physical and labor on income are found in income equation. Whilst positive effects of pollutant emissions, physical capital and the secondary industry share on pollution abatement expenses are also found in abatement equation.     

Income shares and capital formation: patterns of recent developments

The development of the functional income distribution in the advanced capitalist economies of France, Germany, the United Kingdom and the U.S.A. has shown a marked shift towards the profit share during the 1980s. Starting from this observation the impact of changing income shares on capital formation is studied in a post-keynesian framework. Following a model proposed by Bhaduri/Marglin, different patterns of income distribution and capital accumulation are distinguished theoretically and are examined empirically for the manufacturing sectors of the investigated economies. It is concluded that the development of the profit share and the rate of capital accumulation on average over the business cycle implies that the conditions for co-operative “wage-led growth” have been established again during the cycle covering the 1980s, although these opportunities for co-operation have not been realized by supply-side politics.     

人力资本、歧视与农民工收入——基于浙江省问卷调查数据的实证研究

本文基于人力资本理论和歧视理论对农民工和城镇职工工资差距进行的实证研究表明,人力资本是导致农民工低收入的主要原因,其中教育对工资差距具有决定性影响;歧视对农民工收入起重要作用,其中反向歧视已成为农民工歧视的主要表现形式。实现农民工收入增长和城乡劳动者平等就业必须"两手抓",一手抓农民工人力资本提升,一手抓制度改革消除对城镇职工的保护和偏袒。